The US dollar versus the Japanese yen currency pair rallied strongly and reached the 108.89 level, from where profit booking began.
After etching the low at 104.44, the bulls pushed the price to the north. Even if the bears tried to stall the movement, the bulls were very astute and, after confirming the double support made possible by the upper line of the descending channel and the 106.92 level, took out the previous peak at 108.47, reaching the 108.89 level, which is the technical correspondent of the psychological 109.00 level.
Of course, the fact that the price stopped under the 109.00 level gives the next upwards move credit. The reason is that, as the traders book their profits, they caused the price to decrease. Now, if the price had managed to pierce 109.00 when the profit parking phase had commenced, then the result would be a false piercing, thus a great selling pressure. But since no false piercing occurred, the bulls are now building up steam for their next move.
So, now the bulls need a support from where to extend a new leg to the upwards so that they can pierce 109.00 and confirm it as support. This springboard is represented by the 108.47 area, but 108.12 could also play this role.
So, a more aggressive approach would be to monitor 108.12, while a more conservative one concentrates on 108.89, both having a first profit target at 110.27.
The price is in an ascending channel where it managed to conquer 108.49. So, as long as it remains in the ascending channel, the bullish profile remains intact. The price can get under 108.49, but, again, as long as the support trendline is confirmed, the bulls will tend to drive the price back above 104.49. The current bullish profile will target 109.12 and then 109.73.
On the other hand, a bearish profile can be considered only if the price pierces 107.08 and confirms it as a resistance, the case in which the target will be 105.51.
Levels to keep an eye on:
D1: 108.89 108.47 108.12 110.27
H4: 108.49 109.12 109.73 107.08 105.51
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