It is hard to predict the trajectory of USD/JPY in the short term. The pair is trapped within an extended sideways movement. However, I am awaiting fresh signals and a clear direction soon because the price cannot move like this forever.
The pair has developed a triangle. So, a valid breakout from this pattern will give us a trading opportunity, a USDX, and JP225 further increase will signal an upside breakout and a bullish movement. Maybe you should stay away for now and wait for a valid breakout before you take action. A false breakout will signal a valid breakout in the opposite direction.
I've said in the previous analysis that the pair seemed oversold and it could increase again after the failure to reach and retest the inside sliding parallel line (SL) of the descending pitchfork. USD/JPY moves sideways around the weekly Pivot Point (107.65) level and now is approaching the triangle's resistance.
I believe that a valid breakout from the triangle and an increase above the 108.03 high will validate a further increase, while a selling opportunity could appear if the price will register a downside breakout and below the S1 (106.78) level.
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USD/JPY could increase towards the upper median line (UML) of the descending pitchfork if the price will make a valid breakout from the chart pattern and above the 108.08 high. The pair is trapped within a triangle and within a minor range. So, a valid breakout from these patterns will bring a great trading opportunity.
The R1 (108.38), R2 (109.25) and the R3 (109.98) could be used as near-term upside targets if the price resumes bullish momentum. A larger drop will be confirmed only after a valid breakdown below the inside sliding line (SL) of the descending pitchfork, so only a downside breakout from the chart pattern will not be enough.
USD/JPY could decrease if the USDX and the Nikkei drop in the short term. A false breakout above the triangle's resistance will validate a potential drop. Technically, if USD/JPY stabilizes above the median line (ML), it could come back towards the upper median line (UML).
