Hello traders! USD/JPY seems to have formed a double bottom near 104.18 a couple of days ago. Price has reached and rejected the key psychological support at 104.00, which could have been the starting point of a correctional move to the upside.
Price has rejected the upper trendline of the descending channel which was broken previously, back on August 11. As long as daily closing prices remain above 104.00, the USD/JPY upside move should be expected.
The price could be heading up to test 105.50 resistance area which is confirmed by two Fibonacci retracement levels, 50%, and 88.6% Fibs as per the chart below. This resistance also corresponds to the simple downtrend trendline as well as the extended 50 Exponential Moving Average. Overall, there is a 150 pip upside move potential, and if/when 105.50 resistance will get broken, this might suggest the change in trend, where USD/JPY might become bullish in the long-run.
Bias: Bullish while above 104.00
Potential Support Zone: 104.30 – 2104.50
Potential Targets: 105.45
Have a profitable trading!