For this pattern to stand any chance of success we would require a direct break and, preferably, sooner than later. If this turns out to be a pattern that recycles back within itself and loses the bullish momentum seen yesterday then this would easily turn into a larger, more complex pattern and range wildly between 123-124.60. This is certainly a potential scenario as we also trade below the weekly R1.
That said if we are to see any retracements this week within the 'RS' range then the weekly pivot around 123.80 may help provide support before bullish momentum picks up again.
The bias is for an eventual break to new highs (above 125.86 due to the aggressive V-bottom seen in July which marked the end of the correction from 125.86 highs. Whilst price action is a little messy it does exhibit more bullish tendencies which have been helped with recent remarks from FED's Dennis Lockhart, who appears on tracks to vote for a rate rise in September.
At this stage it is irrelevant if the FED do raise in September or not because if we continue to see similar comments leading up to the event then we can assume continued Greenback buying.
Assuming we see a direct break above 124.60 then this level becomes suitable support to consider buying dips at (or above). 125 is a clear intraday target but I suspect traders would soon be setting thier sights on 125.50 and 125.86 highs, assuming sentiment on Greenback remains as bullish as it is.
USDJPY revving up for a breakout
Recent price action suggests an Inverted Head and Shoulders pattern could be unferway to confirm a bullish break above 124.60