USD/JPY Price Analysis: Bulls are firmer in a rising channel formation, 118.00 eyed

• Bulls have carry-forwarded the stellar buying of the last week and have overstepped 117.50.
• A rising channel formation provides buying opportunity after every pullback towards lower end.
• The 20 and 50 EMAs are scaling higher, which adds to the upside filters.

The USD/JPY pair has carry-forwarded the stellar buying of the last week and has overstepped 117.50. The greenback bulls strengthened after the major settled above the five-year high at 116.30 last week. A long full-bodied bullish candle was formed last week, which indicates an adrenaline rush in the major.

On the weekly chart, USD/JPY witnessed a sharp upside after breaching the potential resistance, which was coincided with 12 May 2017, 14 July 2017, 5 October 2018 and 15 October 2021 at 114.53. The 20-period Exponential Moving Average (EMA) at 114.71 has acted as a major support. Currently, the pair is trading in a rising channel in which every pullback towards the lower trendline acts as a buying opportunity of the market participants.

The Relative Strength Index (RSI) (14) is oscillating in a range of 60.00-80.00, which indicates a continuation of a bullish rally.

The 20-period and 50-period EMAs at 114.71 and 112.35 respectively, are scaling higher, which adds to the upside filters.

For further upside, bulls need to surpass Monday’s high at 117.60, which will send the pair to a round figure of 118.00. Breach of the latter will drive the major to an ultimate resistance near 15 December 2016 high at 118.67.

On the contrary, bears can have the driving seat if the major plunge below Thursday’s low at 115.80. This will drag the pair towards 50-period EMA at 115.10 and February 24 low at 114.40.

USD/JPY weekly chart

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