FX.co ★ USDJPY in bounce mode eyeing 107.50.

As we warned in previous posts, USDJPY was ready for a bounce towards 107-107.50 and maybe higher. Price broke above short-term resistance and is trying to recapture 107. There is potential for a move higher and bulls are in control of the short-term trend as long as price is above 105.85.

Red line - short-term resistance

Blue lines - bullish divergence

Green line - important resistance trend line

USDJPY is expected to move towards the green trend line resistance around 107.50. Short-term trend is bullish and as can be seen in the 4 hour chart below, price is above the Kumo (cloud) with tenkan-sen (red line indicator) above the kijun-sen (yellow line indicator) and with a recent bullish cross.

Support in the 4 hour chart is found in the upper cloud boundary at 106.30. Major support is at the lower cloud boundary at 105.60. Bulls do not want to see price break below that level. Trend is bullish in the short-term as long as price is above the cloud. The Chikou span and both tenkan-sen kijun-sen indicators are positively sloped implying more upside should be expected at least at the start of the week.