USD/JPY: continuing within the bullish formation, targetting 115.56 (imoku 2)

Currently, USD/JPY is trading at 114.49, up 0.01% on the day, having posted a daily high at 114.74 and low at 114.39.

Japanese inflation shows slight improvement, far from BOJ's 2% target

USD/JPY bulls have been in control from the 113 handle and in correction of the bearish trend commencing mid December resulting in a double bottom and head and shoulders (H&D) bullish formation. The dollar is fragile and volatile around the uncertainties of Trump in his first full week in office. Heads will soon start turning to the Fed again while the BoJ is coming up next week. There is speculation that the BoJ have started a form of tapering explained here: BoJ silently tapering? - BAML

USD/JPY levels

USD/JPY has rallied up to the 100 sma on the 4hr sticks in an extension of the H&S's pattern and bullish formation and is testing minor resistance. "Rallies will need to regain 115.56 (imoku 2) to alleviate downside pressure. Key short term resistance is the 16 month resistance line at 118.34," explained analysts at Commerzbank.

Spot is presently trading at 114.49, and next resistance can be seen at 114.73 (Daily 20 SMA), 114.74 (Daily High), 114.76 (Daily Classic R3), 114.80 (Weekly High) and 114.87 (Yesterday's High). Next support to the downside can be found at 114.48 (Daily Open), 114.39 (Daily Low), 114.38 (Daily Classic R2), 114.24 (Hourly 20 EMA) and 114.23 (Weekly Classic PP).