USD/JPY in Bullish Hands from 105.09

The US dollar versus the Japanese yen currency pair seems to be on its way to the next area of interest — 107.00. Are the bears going to stand aside?

Long-term perspective
After validating the double resistance etched by the 107.00 psychological level and the falling trendline, the price continued to sink until the 102.59 low.
Even if the corrective swing — from 102.59 to 104.39 — unfolded without any significant differences from the previous ones, the impulse that followed was anything but the earlier ones — as it delayed the fall, and, as a result, forming an angled rectangle that, being a continuation chart pattern, it continued the rise that preceded it.
The result was a sharp piercing of the double resistance area defined by the same falling trendline and the intermediary level of 103.74, one so determined that it climbed — on the first run — beyond the first relevant resistance area, 105.09, respectively.
As expected, the bears counteracted, etching — from the 105.76 — a fall that prolonged until the 104.40 low, well under the 105.09 area that the bulls were willing to conquer.
Still, the bulls printed a second rally that climbed until the 106.22 peak, made a throwback to 105.09, validated it as support, and noted another rise, inscribing the high of 106.43.
One possible evolution is the formation of a flat, limited by 106.12 as resistance and 105.09 as support. Another possibility is to see a fall finding support at the previous peak of 105.76. In this latter possibility, the bulls would target 106.12 as the first — and partial — profit booking area, seeking to conquer it — which, if they do, allows them to touch their 107.00 main objective.

Short-term perspective
From the 103.55 low, the price climbed until the 105.76 high. Once there, it fell until the 104.44 support, which, after being validated, spawned a rise that touched the 106.22 high.
The 106.22 unleashed a fall that extended a little below the 105.27 level, at the 104.92 low. However, the bulls quickly recovered, setting the price above the next resistance area — 106.02.
As long as the price oscillates above 106.02, the objective of 106.77 is in reach. On the other hand, if 106.02 gives way, then 105.76 — as discussed for the daily chart — may provide support. If it doesn’t, then the fall could continue until the 105.27 intermediary level.

Levels to keep an eye on:

D1: 106.12 105.09 107.00 and the peak of 105.76
H4: 106.02 106.77 105.27

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Original from: www.earnforex.com