USDJPY: Pair Defends Bullish Trend Line

The USDJPY pair was flattish on Wednesday and it was waiting for an incentive to move, while FX traders ignored today's decline in EU indices and, therefore, the USDJPY pair remained stable. Usually, when stocks fall, the yen strengthens.

The long-term picture for the USDJPY pair still seems bullish as the greenback managed to defend the very important rising trend line, which was tested on Monday and is now located at 111.75. While the pair trades above, the short-term tactic could push the greenback higher.

Bulls are now trying to breach the first resistance of previous highs near 112.40 and if the resistance does not hold at this level, the price could move toward 113.10.

On the downside, if the uptrend line is broken, the bullish outlook could be cancelled with a possible drop to 110.50, where September lows are located.

US yields have been consolidating recently and, if they start to move up again, that could be the mentioned bullish incentive for the USDJPY pair.

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