USD/JPY: En-route to its next bullish target of 114.40-50

Cycles & Levels: The market remains unambiguously bullish off the weekly, with last Friday’s close at the highs supporting this view. On the daily, price action and the cycle, both constitute an endorsement to engage in buy-side action towards the next target at 114.40/50. On the hourly, not only we are on the cusp of breaking into new highs, but we also see bullish order flow. If we can find acceptance above the previous high without previously having tested the 50% fib retracement, that would be a decisive testament that this market is poised to continue towards the expected daily targets.

Correlations & Volumes: Not only we are emboldened by an environment of USD strength near-term (order flow wise), but if we dig deeper, the pair is only backed up by Friday’s increase in buy-side volume, by the positioning of the POC at 113.00, and a surging bond yield spread between the US and the Japanese 5-year.