USD/JPY Bullish Technical Setup Points to 106

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Written By: Mircea Vasiu
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    Summary:
  • USD/JPY bullish setup remains intact as it bounced from dynamic support. The price action now looks bullish with the market targeting 106 and beyond.

The USD/JPY has been one of the currency pairs with the smallest average true range during the pandemic. Unusual for a currency pair of its caliber, the tight ranges led to a declining interest in trading it from the market participants.

It came so close to the magical 100 level recently that many have seen the pair bound to break it. Probably it will do so in the future, but at this point it reversed and started a move higher that has all the characteristics of a bullish trend.

What is interesting about the move higher in the USD/JPY pair is that it comes at a time when everyone is bearish the dollar. Yet, slowly but surely, the pair grinds higher, finding buyers on every dip.

USD/JPY Technical Analysis

The recent decline got rejected from dynamic support. This week’s price action was very slow on all dollar pairs, mostly due to lack of important economic releases. Because it is Friday already, we may see some kind of a squeeze in the dollar pairs, given the lack of traction seen the entire week.

Bulls may want to remain long and to add when the price crosses into the upper half of the rising channel, targeting the upper edge of it. On the flip side, a move below 104.43 would invalidate the setup.

USD/JPY Price Forecast

Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.

Published by
Written By: Mircea Vasiu