USD/JPY Price Analysis: A test of channel break advocates sheer upside

• An upside break of the Rising Channel has strengthened the greenback bulls.
• The asset is expected to refresh its 24-year high ahead.
• Oscillation in a bullish range by the RSI (14) adds to the upside filters.

The USD/JPY pair has recovered its morning losses after slipping to near 139.88. The asset has managed to recapture the psychological resistance of 140.00 and is hovering above the same. On a broader note, the asset has displayed a juggernaut rally and refreshed its 24-year high at 140.27.

An ongoing break and test phase of the Rising Channel chart pattern on a four-hour scale is indicating that the market participants are gearing up for a vertical upside move ahead. The upper portion of the above-mentioned chart pattern is placed from August 5 high at 135.59 while the lower portion is plotted from August 11 low at 131.73.

The 20-and 50-period Exponential Moving Averages (EMAs) at 139.26 and 138.23 respectively are scaling towards the north, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 20.00-40.00, which signals a continuation of upside momentum.

Should the asset break above Monday’s high at 140.27, the greenback bulls will send the major towards the 27 July 1998 low at 140.81. A breach of the latter will send the asset towards August 1998 high at 142.46.

Alternatively, a slippage below the round-level support of 139.00 will drag the asset towards Tuesday’s low at 138.05, followed by an August 27 high at 137.21.

USD/JPY four-hour chart