Monthly chart:

The pair broke a strong cluster of resistance (trendline that contained the long-term downtrend in years 1986, 1990, 1998; 23.6% retracement of the 1982 to 2011 decline; 2007 high at 124.14) and is poised to close the month above that. There's not a lot of chart based resistance until 2002 high at 135.90, but the big figure levels at 125.00 and 130.00 will without doubt be closely watched.

Weekly chart:

Following 600+ pip correction in December 2014, the pair consolidated in 115.50 - 122.00 range - an ascending triangle. The pattern gave way in the past week and the breakout projects towards 128.50. Pattern top at 122.00 shall now act as a solid support, should the pair retest it, but I find that unlikely at this point. Below that, 20 and 50 week SMA may come into play, the latter has supported the uptrend since its beginning in Q4 2012.

Daily chart:

The breakout was a consequence of re-emerged Dollar strength rather than Yen weakness and the rally is not as strong as when the BOJ launched its easing program on April 4th 2013 or when expanded it on October 31th 2014. Still, there appears to be enough momentum in the move for it to extend to at least 125 before running out of steam. If we take this as a breakout from recent 118.50 - 122.00 range, measured target projects to 125.50.


Following signs of recovery in Japanese businesses, exports and GDP, BOJ is expected to remain on the sidelines for at least a couple of months. The direction in the pair will thus depend mostly on US economic data and expectations regarding timing of rate hikes. After weaker Q1, US data started to improve and I expect it to gradually return to 2014 trends. On the 1st of July, 2015, at 12:00 GMT, that would put the pair to 127.25.
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