chart of day usdjpy short term potential bullish impulsive upleg resumes 1855612017

In our previous article, “USD/JPY short-term uptrend remains intact as Japan CPI looms” dated on 29 June 2017, the USD/JPY had held at the predefined pivotal support of 111.80. Thereafter, it rallied as expected towards its short-term resistance/target of 113.00/113.20. Click here for a recap.

Let’s us now examine its latest technical elements.

Short-term technical outlook on USD/JPY

(Click to enlarge charts)

Key technical elements

• The USD/JPY has broken above its recent minor swing high area of 113.45 printed yesterday, 04 July and also the minor descending trendline resistance now turns pull-back support at 113.30 (see 1 hour chart).
• Current price action has suggested that the minor corrective pull-back /consolidation from yesterday’ high of 113.45 to 112.73 low is likely to be over. The USD/JPY is now resuming the potential bullish impulsive upleg phase within its on-going short-term uptrend that is in place since 15 June 2017 low of 108.80 (see 1 hour chart).
• The next significant short-term resistances stand at 114.37 (the 11 May 2017 swing high) follow by 114.85/115.00 (upper boundary of the aforementioned short-term ascending channel, a Fibonacci projection cluster & the lower limit of the medium-term resistance zone of 115.00/116.20 – see daily chart).
• The hourly Stochastic oscillator has reached an extreme overbought level which suggests the USD/JPY may shape a minor pull-back at this juncture towards the 113.30 intermediate support.
• The key short-term support now rests at 112.80 which is defined by the lower boundary of the aforementioned short-term ascending channel and the minor swing low areas of 04/05 July 2017 (see 1 hour chart).

Key levels (1 to 3 days)

Intermediate support: 113.30

Pivot (key support): 112.80

Resistances: 114.37 & 114.85/115.00

Next support: 117.70

Conclusion

The USD/JPY may now see a minor pull-back first towards 113.30 intermediate support before another potential upleg materialises to target the next resistances at 114.37 follow by 114.85/115.00 next.

However, failure to hold above the 112.80 short-term pivotal support is likely to invalidate the preferred bullish bias to reinstate a deeper corrective decline towards the next support at 117.70 (former minor swing high areas of 02 June/20 June 2016 & 38.2% Fibonacci retracement of the rally from 15 June 2017 low).

Charts are from eSignal

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