The Japanese Yen (JPY) makes minor gains against the US Dollar (USD) on Tuesday, with the USD/JPY recovering from a weak start to return to familiar territory just below the key 150 level. The trend is up and biased to extend with the threat of a breakout from a right-angled triangle providing a bullish technical clue. Comments from Bank of Japan (BoJ) governor Katsuo Ueda fueled USD/JPY’s last bullish impulse. The BoJ governor said on Friday that the bank would be maintaining its current accommodative approach in response to figures showing a slowdown in inflation.
USD/JPY is in an overall uptrend, rising on long-term, intermediate, and short-term bases. It is expected to continue this trend higher, with the next major target at the 152.00 highs achieved in October 2022. The pair is completing what appears to be an ascending triangle on the daily chart and a decisive break above the 150.16 highs of October 3 would provide confirmation of a breakout – also with a target in or around the 152s. In technical terms, a ‘decisive break’ consists of a long green daily candlestick that pierces cleanly above the critical level in question and then closes near to the high of the day. It can also mean three up days in a row that break cleanly above the level, with the final day closing near its high. Triangles are sometimes the penultimate formations in a trend, suggesting the current uptrend may be nearing its culmination point.