USDJPY - The reversal

USDJPY (1H) - short term bullish bias

Following our forecast of waning selling pressure on the pair yesterday, the US dollar has seen a dramatic U-turn. The last sell-off overnight failed to close below the major support of 107.80, which gave buyers confidence to get in the dip. The break of the immediate resistance level of 108.60 has prompted sellers to cover their positions, further boosting the upward momentum in the process. 108.80 is a major supply area and its break could trigger an extended rally.

Key support: 108.30
Key resistance: 108.80