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Forex pairs in this Article » USD/JPY (Bali) - The medium term rally phase for USD/JPY is back on track following the reversal from the October/November lows, notes JP Morgan FX Strategists.

Key Quotes

"The push above the 103/104 resistance zone (May peak) and break from the sixmonth consolidation phase has confirmed a continuation of the bull trend from the 2011 cycle low. While the current overbought setup and extreme positioning are short term concerns, additional upside remains likely."

"In turn, the focus has shifted to next line of medium term targets starting with the important 105.50/106.75 area. This zone includes the 61.8% retracement from the 2007 high, as well as the critical downtrendline from the 1998 cycle peak. Note that some pause from here seems likely.

"Upside breaks would instead target the 110.00/70 area (2008 high). From a short term perspective, the 103.90/75 area will act as key support. However, a violation of the 99.95/00 area (November breakout zone) is now necessary to confirm the onset of a more sustained corrective phase."
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