USD/JPY Daily Analysis
The USD/JPY has resumed its rally, breaking through the resistance at 137.09. The strong break of the Fibonacci level at 136.64 suggests a bullish trend. In the short term, the bias is on the upside, and the rally is expected to target the next Fibonacci level at 142.48. However, if the support level of 135.35 is broken, it could indicate a short-term top. But if there is a retreat, the outlook will still remain bullish.
Looking at the bigger picture, the break of the 38.2% retracement of 151.93 to 127.20 at 136.64 suggests that the downward trend from 151.93 has already completed at 127.20. The rise from 127.20 is seen as the second leg of the medium-term pattern from 151.93. Further rally is expected to reach the 61.8% retracement at 142.48. This will be the favored scenario as long as the 55-day EMA (now at 134.10) holds.
