The USD/JPY currency pair, on the H4 time-frame, was in a downtrend until the 18th of July when a lower bottom was recorded at 107.211. The bulls found the price inviting and buyers overcame sellers.
After the bottom at 107.211 the market broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator pierced the zero baseline into bullish terrain. This confirmed the possibility of a technical trend reversal.
A possible critical resistance level formed when a higher top was recorded on the 22nd of July at 108.072. Sellers then temporarily pulled the price lower and a higher bottom was registering on the same day at 107.768 with a Hammer Candlestick forming at the turnaround.
Subsequently, bullish pressure caused the USD/JPY to break through the critical resistance level at 108.072 and three possible price targets may be expected from there.
Attaching the Fibonacci tool to the top of the possible reversal at 108.072 and dragging it to the bottom of the pullback at 107.768, the following targets may be considered. The first target can be anticipated at 108.259 (161 %). The second price target can be predicted at 108.562 (261.8%) and the third and final target may be expected at 109.053 (423.6%).
If the support level at 107.768 is broken, the position needs to be liquidated because the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the USD/JPY currency pair on the H4 time frame will remain bullish.
After the bottom at 107.211 the market broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator pierced the zero baseline into bullish terrain. This confirmed the possibility of a technical trend reversal.
A possible critical resistance level formed when a higher top was recorded on the 22nd of July at 108.072. Sellers then temporarily pulled the price lower and a higher bottom was registering on the same day at 107.768 with a Hammer Candlestick forming at the turnaround.
Subsequently, bullish pressure caused the USD/JPY to break through the critical resistance level at 108.072 and three possible price targets may be expected from there.
Attaching the Fibonacci tool to the top of the possible reversal at 108.072 and dragging it to the bottom of the pullback at 107.768, the following targets may be considered. The first target can be anticipated at 108.259 (161 %). The second price target can be predicted at 108.562 (261.8%) and the third and final target may be expected at 109.053 (423.6%).
If the support level at 107.768 is broken, the position needs to be liquidated because the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the USD/JPY currency pair on the H4 time frame will remain bullish.