The USD/JPY pair has recently broken above a critical level, indicating a bullish trend. The pair has surpassed its long-term trendline and a key upside obstacle at 147.24, suggesting a possible continuation of the short-term uptrend. The next target for the pair is at 149.40, the August 15 high. Momentum has been bullish since August and the MACD indicator is in positive territory, further supporting the bullish outlook.
However, there is a possibility that USD/JPY has completed a three-wave correction of the medium-term downtrend during July. If this is the case, the pair may start to decline again as the longer-term bearish cycle takes hold. A close below the 50-day SMA at 145.24 could indicate a resumption of the medium-term downtrend, with the next target likely at around 141.72, the wave B lows.
In the daily chart, a close above 149.40 would confirm the extension of the short-term uptrend, with the next target potentially at 151.09 and the 200-day SMA. Despite the bullish outlook, it is important to remain cautious as it is still too early to determine whether the three-wave corrective pattern has been completed. Price action is currently not showing any signs of weakness, but a close below the 50-day SMA could change the outlook.
Overall, the USD/JPY pair is currently in a bullish trend, with a possible continuation of the short-term uptrend towards the next resistance levels. However, traders should be aware of the potential for a reversal if the medium-term downtrend resumes. Keeping a close eye on key support and resistance levels, such as the 50-day SMA and the August 15 high, can help determine the future direction of the pair.
