USD/JPY has rallied after the recent decline, but we need confirmation that the rate will develop a strong leg higher. Technically, the pair is expected to jump higher but the uncertainty is high due to the US presidential election.
Fundamentally, better than expected US data today should lift USD/JPY as the USDX and JP225 could resume the upside movement. The pair has formed a potential Double Bottom pattern on the H4 chart. The reversal pattern along with the several false breakdowns signals an upward swing.
USD/JPY should drop again if the USDX plunges after the election final results, or maybe after the FOMC.
USD/JPY Up Reversal?
USD/JPY is traded within a downward channel. A valid upside breakout and a bullish closure above 105.34 today's high signals further growth. The several false breakdowns under 104.18 could send the rate higher again.
It has failed to stabilize under the Pivot Point (104.57) in the last attempt, so an extended rally is favored. The upside reversal could be confirmed only by a drop and stabilization under the 104.18 static support.
- USD/JPY Trading Tips
A valid breakout above the black downtrend line, up channel's resistance, suggest buying USD/JPY. So, if the rate jumps, closes, and stabilizes above the pattern's upside line and above 105.34, you can buy it with a potential upside target at the 107.03 level.
USD/JPY is traded above a major and strong support area, so we cannot sell it here. We may have a short opportunity only if the rate drops and stabilizes under the 104.00 psychological level.
