The USDJPY currency pair, on the D1 time-frame, was in a downward spiral until June the 23rd when a lower bottom was reached at 106.071. Buyers found the price attractive and demand began exceeding supply.
After the lower bottom at 106.071, the price traversed upwards through both the 15 and 34 Simple Moving Averages and the Momentum Oscillator crossed the zero baselines into bullish terrain.
A higher top and possible critical resistance level formed on July the 1st at 108.162 and sellers are currently applying downward pressure to the market.
If the USDJPY currency pair breaks through the critical resistance level at 108.162, then three possible price targets may be calculated from there.
Applying the Fibonacci tool to the top of the resistance level at 108.162 and dragging it to the bottom of a possible support area near the 15 Simple Moving Average at 107.155, the following targets could be considered. The first target might be projected at 108.784 (161 %) and the second price target is likely at 109.791 (261.8%). The third and final target may well be expected at 111.421 (423.6%) if the uptrend continues making higher tops and bottoms.
If, however, the 107.155 support level is reached, the bullish scenario above is invalidated and will need to be re-assessed.
As long as buyers maintain a positive sentiment and demand overwhelms supply, the outlook for the USDJPY currency pair on the Daily time-frame will remain bullish.
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