USD/JPY Price Analysis: Further upside hinges on 138.70 breakout

• USD/JPY grinds higher after refreshing two-week top.
• Clear break of three-week-old descending trend line, upbeat oscillators favor buyers.
• Convergence of 61.8% Fibonacci retracement level, downward-sloping resistance line from late October challenges further upside.

USD/JPY bulls struggle to defend the previous day’s run-up around 137.70-80, despite refreshing a multi-day high, during early Tuesday. That said, the Yen pair remains sidelined after rising to the highest levels since December 01.

The quote’s latest run-up could be linked to the week-start break of a descending resistance line from November 23, now support around 136.10. Also keeping the USD/JPY buyers hopeful are the bullish MACD signals and the firmer RSI (14), not overbought.

However, a convergence of the 61.8% Fibonacci retracement level of the Yen pair’s run-up between August and October, as well as a seven-week-long downward-sloping trend line, challenges the USD/JPY bulls around 138.70.

Should the USD/JPY buyers manage to cross the 138.70 resistance confluence, the odds of their rush towards the tops marked during late November, near 139.90 and 142.25, can’t be ruled out.

On the flip side, pullback moves may aim for the previous resistance line near 136.10 to convince the sellers. Even so, the 200-DMA could challenge the USD/JPY pair’s short-term downside near 135.25.

In a case where the quote remains bears past 135.25, the sellers could aim for refreshing the monthly low, currently around 133.60.

USD/JPY: Daily chart

Trend: Further upside expected