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  • USD/JPY has created a bull flag on the 15-minute chart.  
  • A move  above 107.74 would confirm a flag breakout and could fuel a rally above 108.00.  

USD/JPY is currently trading at 107.65, representing 0.10% losses on the day. The pair is trading in the red amid a marginal decline in the futures on the S&P 500 index.  

The Bank of Japan (BOJ) trimmed purchases of bonds maturing in five to 10 years, but the move failed to move the needle on the JPY pairs. After all, the reduction was part of routine operations.  

Looking forward, the pair may rise well above 108.00 if the bull flag seen on the 15-minute chart is breached to the higher side.  

A bull flag is a bullish continuation pattern which often ends up accelerating the preceding bullish move.  

In this case, the flag breakout, if confirmed, would further solidify the bullish view put forward by the descending trendline breakout (confirmed on Wednesday). As of writing, the upper edge of the flag is located at 107.74.  

The bullish case would be invalidated if the flag pattern is breached to the downside. That looks unlikely as the US 10-year yield jumped close to 8 basis points on Wednesday despite President Trump’s impeachment inquiry.  

15-minute chart

Trend: Bullish above 107.74

Technical levels