The USDJPY, on the D1 time frame, was in a steady downtrend until it reached a lower bottom at 102.591 on the 6th of January. The Bulls found the price attractive, and the demand overcame the supply.
Since then, the price has crossed upwards through both the 15 and 34 Simple Moving Averages, and the Momentum Oscillator has crossed the zero baselines into bullish territory. A Three White Soldiers Candlestick pattern has further confirmed that a possible trend change might progress.
A higher top and critical resistance level formed on the 11th of January at 104.399. That was followed by the bears coming to the immediate defence of their positions, leading to a stalemate between them and the bulls.
If the USDJPY breaks through the critical resistance level at 104.399, then three possible price targets can be calculated from there. Applying the Fibonacci tool to the top of the resistance level at 104.399 and dragging it to a previous support level near the 15 Simple Moving Average at 103.526, the following targets can be considered. The first target may be projected at 104.939 (161 %). The second price target might be likely at 105.812 (261.8%), and the final target can be expected at 107.224 (423.6%) – if the uptrend continues.
If the support level at 103.526 is broken, the bullish scenario above is invalidated and must be re-assessed before any action is taken.
As long as positive sentiment remains and demand overwhelms supply, the USDJPY market outlook on the Daily time frame will remain bullish.
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