USD/JPY is still on a strong uptrend, as seen from the rising trend line connecting the lows of the price on the 4-hour time frame. At the moment, the pair is testing the trend line around the 104.00 major psychological handle.
Stochastic has dipped and climbed out of the oversold region, indicating that a bounce might take place. However, a breakdown is still possible if dollar bulls are exhausted.
A break lower could last until the next support level at the 103.00 major psychological level while a bounce could go until the previous highs around the 105.50 mark.
By Kate Curtis from Trader’s Way