The US dollar versus the Japanese yen currency pair seems to be governed by the bulls. The question is now: are the bulls tired or they are just preparing an all-in towards 110.27?
Long-term perspective
After confirming the support of 105.52 — via the false piercing that printed the low of 104.44 — the price began an ascending movement that, eventually, ended the bearish trend that started at 112.20.
The price paused at the double resistance made possible by the 108.89 level and the lower line of the channel that encloses the angled rectangle, from where it retraced towards 108.12 and crystalized the low of 108.24.
After the low 108.24, the price made a new higher high by piercing the 108.89 resistance.
So, given the higher high, the low of 108.24 (which is a lower high with respect to the low of October 3), and the fact that the price did not touch the 108.12 level (a thing which translates into a greater bullish pressure), the conclusion is that the expectations are for the bulls to drive the prices higher, a prime target being 110.27.
The profile changes to a bearish one only if the price gets under the 108.12 level and confirms it as resistance. In this case, the target would be 106.92.
Short-term perspective
The price is in an ascending channel and, after confirming the 108.49 support, it almost touched the 109.12 level and began a small consolidation. This translates into the bulls gathering their steam in order to push through 109.12. After 109.12 is confirmed as support, the next target is 109.73.
The possibility of the price revisiting the double support etched by the lower trend line and the level of 108.49 is viable. In this case, the first target will be represented by 109.12, followed by 109.73. Only if the double support is pierced and confirmed as resistance the price will reach 107.55.
Levels to keep an eye on:
D1: 108.89 108.12 108.89 106.92
H4: 108.49 109.12 109.73 107.55
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