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USD/JPY in a Breakout and Pullback

Today, the USD gained possibly on the back of some better-than-expected jobs and retail sales data.

The 1H chart shows that USD/JPY has been sliding throughout the week, from the high on the year at 121.84 to 117.43. But after the US data release, we saw a a rally that broke above this week's falling speedline. 

USD/JPY 1H Chart 12/11

(click to enlarge)

This opens up the bullish continuation scenario, but we have our first pullback from 119.50 as we wrap up the 12/11 session.

Now, the 12/12 Asian session will face a USD/JPY at the crossroads.If price can fall sback below 118.25, it might invalidate today's bullish attempt, and suggest furhter USD/JPY consolidation or bearish correction. If price can hold above 118.25, preferably above 118.50 and the rising speedline from 12/10, then rise above 119, we are likely to be in the bullish continuation scenario.

The bullish continuation scenario has 120 as the first near-term target, then the 121.84 high in the short-term. In the medium-term, there will be pressure to break this 121.84 level to 122.00 or higher.

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