The bearish correction in USD/JPY was shorter-lived and less pronounced than I thought. Price retreated from 118.65 but was held above 116. The 4H chart shows that price action has evolved into a flag pattern.USD/JPy 4H Chart 1/3(click to enlarge)Consolidation Breakout:- Price action is starting the year with a push and a break above the flag pattern.- Also, the RSI has pushed back above 60, which reflects loss of any bearish momentum during this flag pattern.- Furthermore, price remains above the 200-, 100-, and 50-period simple moving averages (SMAs), suggesting that bulls are in control in this time-frame.USD/JPY Daily Chart 1/3(click to enlarge)Bullish Continuation:-The 118.65 handle will likely be tested. - Given the intact bull trend, we should anticipate continuation towards at least 120.- The daily chart shows that the next resistance pivot, which was also the 2016 high will be around 121.60. For now, we should limit the bullish outlook to 121.60.