USDJPY is trading at 107.37 having broken out of the downward sloping wedge pattern. In our last analysis we warned bears that a break above 107 could be an important bullish signal as price was bouncing off the lower wedge pattern boundary.
USDJPY could very well have finished the counter trend move at the 50% Fibonacci retracement and could now be starting its next leg higher. Next resistance level is at 107.85-108 and a break above this level will open the way for a move towards 109.20 and higher. Support is found at 106.50 and bulls do not want to see price break below this level. This would be a bearish signal. Short-term trend is changing to bullish and so do I. As long as price is above 106.50 I am optimistic.
