USDJPY: Bullish momentum might be building

Summary

• USDJPY breaking above 147.898 may send bullish signal
• Three potential targets identified
• If 144.360 support is broken, bullish scenario becomes invalid

Rising tops and bottoms should keep USDJPY bulls in play, pending any bearish intervention by the BOJ. 

As long as bulls can keep driving the upward momentum, the market sentiment for USDJPY on the D1 time frame will remain bullish.

The bulls in the USDJPY currency pair on the D1 time frame are in the process of breaking out of a ranging market. The ranging market started when the price began oscillating around a weekly support level.

A hint of continued possible bullish strength lay in the fact that the weekly support level was never properly breached by the bears, as well as the price never breaking the 34 Simple Moving Average and the Momentum Oscillator staying in bullish territory.

If the bulls can break past the 147.898 price level that is located just above the last higher top that occurred on 5 September, then three targets become possible from there.

Attaching a modified Fibonacci tool to the 147.898 price level and dragging it to 144.360, which is found just below the last bottom that happened on 1 September, the following targets can be established:

• The first target is possible at 149.843 (Target 1).
• The second price target is likely at 151.435 (Target 2) if the bulls can reach close to the 151.921 weekly resistance level
• The third price target is probable at 153.204 (Target 3) if the bulls can properly break through the 151.921 weekly resistance level

If the price breaks to the down side and the 144.360 price level at the last bottom on 1 September is broken, this scenario is no longer valid