Bullish USDJPY Awaits Breakout from Flag Pattern
Solid ECN – The USDJPY pair is consolidating in a narrow area between the 149.5 support and 150.8 resistance. The RSI indicator shows divergence, which could be interpreted as a possible trend reversal. However, the decline halted, and the bears could not close below the 149.5 support. Consequently, the price stepped back into the range area.
From a technical standpoint, the primary trend is bullish as long as the pair trades inside the bullish flag and above the 23.6% Fibonacci support. For the uptrend to continue, the price should stabilize itself above 150.8. In this scenario, the pair will likely target the upper band of the flag.
Going short on USDJPY is not recommended, considering the robust bullish bias on the trend direction. Therefore, waiting for a buying opportunity is less risky than going short.