The US dollar versus the Japanese yen currency pair appreciated after the bulls managed to pull themselves together.
After printing the low of 104.44, the price started a bullish trend. As of November 29, the trend has three impulsive swings, the latest being the one in which the market currently finds itself in.
But this last swing is also the one that managed to put the price back into the ascending channel, which gives a lot of credit to the bulls.
And yet another thing that goes for the bulls is the higher high that was printed with respect to the previous high, 109.48, respectively.
The candle on November 28 is a hanging man, a candlestick pattern that usually signals that the bears are making their way back into the market. However, it can be said that the pattern is already invalidated, as the next one — today’s — oscillated beyond its high.
If today’s candle closes under the low of the hanging man, then it can be considered that the market is at least pausing, a thing that could favor the bears but in any circumstance does not mean that they made a strong comeback.
In the current context, at best, the bears could produce a depreciation that, when it reaches the support trendline, because of the very strong bullish optimism, will cause a rally that would bring the price even closer to the main target of 110.29.
The only occurrence that has the potential to cancel the bullish profile is the piercing of the 108.85 support.
Given the situation, aggressive traders can enter the market from the area of the hanging man, whereas the more conservative ones may wait for further retracement.
After confirming the 108.43 support, the price rallied, pierced the 109.19 resistance, and made a departure from it, thus dimming the chances of the piercing to be rendered as a false one.
At the end of the rally, the market looks to have printed a pennant, a pattern which favors the continuation of the movement that precedes it.
Of course, a small retracement is also a possibility. Such a scenario will allow the price to revisit the 109.19 level to confirm it as support. This unfolding aligns with the expectation of price confirming the support line of the daily ascending channel.
The main target is represented by 109.99.
Levels to keep an eye on:
D1: 109.29 108.85
H4: 109.19 109.99
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