The USD/JPY pair rallied today and now is trading at 135.09. In the short term, the currency pair was in a corrective phase which was natural after the last swing higher. The retreat was only a temporary one, the bias remains bullish.
Fundamentally, the Japanese Yen was punished by the BOJ which maintained the monetary policy in the June meeting. The BOJ Policy Rate was left unchanged at -0.10% as expected. This could be bad for the JPY. The USD/JPY pair is strongly bullish even if the Industrial Production and Capacity Utilization Rate came in worse than expected. DXY's further growth boosted the USD while the Japanese Yen Futures' drop weakened the Yen.
USD/JPY Bullish Bias!
As you can see on the H4 chart, USD/JPY registered false breakouts above the upper median line (uml). So, in the short term, the rate dropped which was natural after such a strong rally.
It has found support at the ascending pitchfork's median line (ml) and now it has rebounded. At the time of writing, the rate reached and retested the upper median line (uml) which represents a dynamic resistance. 135.19 - 135.59 area is seen as a resistance area as well.
USD/JPY Outlook!
The USD/JPY pair is strongly bullish. It is challenging the upper median line (uml) and the 135.19 - 135.59 resistance. A valid breakout through the 135.59 and above the upper median line (uml) may signal an upside continuation and could bring new long opportunities.
Registering false breakouts through the immediate resistance levels or developing a bearish pattern may signal that the upwards movement ended and that the USD/JPY pair could come back down.
