- Daily chart shows inverse head-and-shoulders breakout.
- The RSI also supports the bullish price pattern.
USD/JPY is looking north with the daily chart reporting a bullish reversal pattern.
The currency pair closed at 108.72 on Monday, confirming an inverse head-and-shoulders breakout. The pattern marks a successful transition from bearish lower highs, lower lows pattern to bullish higher lows and higher highs pattern.
Put simply, the path of least resistance is now to the higher side. The pair, therefore, could test and possibly break above the 50-day moving average (MA), currently at 108.97.
Supporting the bullish case is the above 50-reading on the 14-day relative strength index.
As of writing, the spot is trading at 108.83, representing 0.10% gains on the day. A close below 108.44 would invalidate the inverse head-and-shoulders breakout.
Daily chart
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Trend: Bullish
Pivot points
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