USD/JPY Broke Above The Trend Line

USD/JPY broke above the trend channel, reached the resistance at 115.50, retraced to test the trend line and continues slowly moving to the upside for now.

It is possible for the test of the resistance trend line not to be over yet and for the pair to retrace again toward it. It is also possible for this to be a false breakout and for the pair to renew its move to the downside.

Still, we should not discount the possibility for a further move north.
Whenever there is a trend channel breakout one of the possibilities is for the pair to reach its limit, which in this case is 365 pips.

If the pair does continue moving to the upside to reach said limit that would mean it will test the resistance zone around 118.50 – 118.70, which is marked on the screenshot with a thick blue line.

In the alternate scenario the pair will begin consolidating sideways as the pair wouldn’t have the energy to reach such an ambitious limit. In that situation we should be on the lookout for patterns (a triangle, a flag, a pennant or others) that are a signal for a move to the downside.

For the moment, however, I think the least likely possibility is for the move to the downside to begin right now.