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.
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.
