USD/JPY Outlook: Larger Bulls Returning to Play After Shallow Correction – Action Forex

USDJPY bounced on Wednesday, gaining 0.7% in Asian / European trading as immediate threats of stronger escalation of the war in Ukraine started to fade, while Trump trade continues to underpin dollar.

Fresh rally retraced almost 76.4% of shallow pullback (156.74/153.28), signaling that correction from new multi-month peak (156.74) might be over).

The notion is supported by Tuesday’s strong downside rejection which left long-tailed daily Doji candle and formed a bear trap under daily Tenkan-sen (154.44) which proved to be a solid support.

Daily Tenkan/Kijun-sen remain in bullish configuration and positive momentum is strong, adding to bullish scenario, in which violation of 156.67/74 (Fibo 76.4% of 161.95/139.57 / / Nov 15 high) would open way for further gains and unmask psychological 160 barrier.

Near-term bias is expected to remain firmly with bulls while the price stays above daily Tenkan-sen, guarding Tuesday’s spike low (153.28) and daily Kijun-sen (152.80).

Res: 156.00; 156.74; 157.86; 158.86.
Sup: 155.42; 154.44; 154.00; 153.28.