USD/JPY: Technicals Leaning in Favour of Further Outperformance

Following the formation of a daily falling wedge taken from ¥146.59 and ¥140.96 and accompanying positive divergence out of the Relative Strength Index (RSI), USD/JPY bulls have been largely on the offensive so far this year.

This has led to the currency pair rupturing the upper boundary of the noted falling wedge, together with a break of the 200-day simple moving average (SMA) at ¥143.20, a daily trendline resistance extended from the high of ¥151.43 as well as daily resistance from ¥144.34. As you can see, Friday ended the week retesting the mettle of the aforesaid resistance to form possible support.

Now, given the trend is unquestionably to the upside on the monthly timeframe, in addition to the recent break of resistance structure on the daily scale, further buying from daily support at ¥144.34 is on the table, targeting the underside of the 50-day simple moving average (SMA) at ¥146.99.