From late 2013 until mid 2014 we have witnessed a sideways wedge formation being built in USDJPY. The top end of the wedge formation has been falling with lower highs while support at 100.70-101 was held throughout this 7 month period. The support levels were attacked furiously but never broken. Finally USDJPY has made a break out above the wedge (triangle with flat bottom) and has given us an intermediate to long-term buy signal with 106 as the most probable target. As can be seen in the weekly chart below, price has held also above the Ichimoku cloud support.
The current breakout pattern is similar to the one we witnessed last year and successfully traded from 98 to 103. So this could be the beginning of a new upward move that could push USDJPY to 106. Taking a closer look at the daily chart we need to note that important support that should hold is the 101.50 price level. As long as price is above that level we remain bullish.
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