USD/JPY hit the 106.15 level after the latest sharp drop. It looks determined to test the near-term upside obstacles in the coming hours. USDX gained ground amid positive economic report. The USD/JPY pair also advanced on the back of a surge in the US dollar.
The pair moves sideways on the H4 chart between 107 and 105.30 levels, the false breakdown could signal an upside breakout and bullish continuation. ADP Non-Farm Employment Change data will bring high volatility on this pair in the US session.
The price has registered only a false breakdown below the downtrend line and below the 50% Fibonacci line of the black ascending pitchfork signal a bullish momentum at least till the median line (ML), or higher to 107 psychological level.
It's too early to talk about an important leg higher as long as USD/JPY stands below the median line (ML) and under the R1 (106.45) level. A breakout of these obstacles and stabilization above could attract more buyers.
- USD/JPY Trading Tips
Anything could happen as long as USD/JPY stays between 107.00 and 105.30 level. That is why we have to wait for a valid breakout from this extended range.
You could buy a bullish closure above 107.00 psychological level with a first upside target around 108.50.
We may have a short opportunity from below 105.20 former low. Actually, USD/JPY may drop in the short term also if it fails to close and stabilize above the median line (ML) and above the R1 (106.45) level.
