I have been bearish USDJPY for a long time but recently and specially yesterday I have changed to neutral and look for bullish confirmation signals of a possible reversal that could at first take us back up to 106. USDJPY has broken the long-term downward sloping trend line resistance and is testing Ichimoku cloud resistance in the daily time frame. A break out above 103.25 will be a bullish confirmation of a reversal. At the same time bulls should hold support above 101.60-101.30 area. As long as price is above that level I remain cautiously bullish.
Moreover we should also not ignore the triple bottom formation around 100. If this pattern is combined with a breakout above the Kumo (cloud) resistance we have a potential target of 106 at least.
On a weekly basis we have bullish divergence signals. A confirmed break out of the bearish channel could at first push price towards the weekly Kijun-sen (yellow line indicator) and next towards the weekly cloud resistance at 110-112.
Traders should be cautious with any USDJPY short positions as this could blow out any time. NFP this Friday will certainly play an important role on the trend that is about to start.