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Technical Analysis – USDJPY shifts from neutral to bullish

USDJPY shifts from neutral to a more bullish bias after the pair managed to break above the tenkan-sen line on Tuesday to rise to a high of 124.19. This resistance level is the 23.6% Fibonacci of the upleg from 118.88 to 125.84. A sustained break above this level would open the way towards the June 5 high of 125.84. A firm break of this peak would confirm the resumption of the uptrend that has been in progress since rising from the low of 75.55 in October 2011.

RSI is above 50 and the market is above the 200-day moving average. These both indicate bullishness. Also the rising Ichimoku cloud supports the underlying bullish market bias.

A fall back below the tenkan-sen line would weaken the upside momentum. To the downside, there is strong support at 122.44 but failure to hold above this would give the bears a stronger hand.

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