USD/JPY: Market’s verdict is 114.40-50 as the next target

Cycles & Levels: The weekly is clearly bullish as per the active up-cycle and from a purely technical standpoint, one would be hard-pressed to be a seller before 114.40-50. The daily continues to make further upside progress in line with the active up-cycle, which has a target of 114.40-50. On the hourly, we’ve printed a double bottom before re-taking the midpoint of the range, therefore the market is very much on course to test the upper edge of the box at 113.75-80.

Correlations & Volumes: With the risk sentiment being so well supported and the US vs JP yield spread at such hefty levels, there is definitely sufficient justification for the price to catch up to its intrinsic valuation. Wednesday’s bullish candle leaves behind plenty of volume being trapped circa 113.20, therefore this should be a market that still enjoys very solid interest to buy the dips.