USD/JPY Technical Analysis: Eyes 110 on flag breakout & uptick in S&P 500 futures

The flag breakout seen in the USD/JPY’s 4-hour chart favors a test of supply around the psychological hurdle of 110.00.  

Validating that bullish case is the uptick in the S&P 500 futures. As of writing, the futures are reporting a 0.27 percent gain. The investors, therefore, could offer JPY –  the funding currency.  

4-hour chart

• The bull flag breakout often accelerates the preceding bullish move. Put simply, the bullish continuation pattern may have opened up upside toward 110.70 (target as per the measured move method, that is, pole height added to breakout price).  
• The relative strength index (RSI) is also biased bullish above 50.00.
• On the way higher, however, the pair may face stiff resistance at 110.00.  
• The bullish setup would be invalidated below 109.32 – low of the previous 4-hour candle.  

Trend: bullish