USD/JPY Price Analysis: Eyes to recapture six-year high at 125.10

• The exploding of the Darvas box chart formation has imbalanced the asset.
• Advancing 20 and 50-period EMAs claim that the upside is intact.
• The RSI (14) has settled in a bullish range of 60.00-80.00.

The USD/JPY pair has turned imbalance and is approaching its fresh six-year high at 125.10, which was recorded on March 28 after auctioning in a narrow-range box. The pair witnessed a bullish open rejection-reverse session on Tuesday as the asset moved lower after opening at 122.80. However, the major faced significant bids to near 122.38 as investors preferred a ‘buy the dip’ approach.

The structure on the hourly scale is displaying a firmer breakout of a Darvas box chart pattern, which is plotted in a range of 121.30-123.00. The exploding of the Darvas box chart pattern results in an expansion of volumes and volatility.

The 20- and 50-period Exponential Moving Averages (EMAs) at 123.35 and 123.00 respectively continue to scale higher, which signals that a bullish bias is intact.

Meanwhile, the Relative Strength Index (RSI) (14) has comfortably settled in a bullish range of 60.00-80.00, which indicates more gains ahead.

A breach of the round level resistance at 124.00 will drive the asset towards the six-year high at 125.10, followed by the 1 June 2015 high at 125.86.

On the contrary, the yen bulls can dictate the asset if it drops below the 50-EMA at 123.00. This will send the asset towards the March 29 and March 30 lows at 121.98 and 121.31 respectively.

USD/JPY hourly chart