FXStreet (Bali) - Valeria Bednarik, Chief Analyst at FXStreet, notes that the technical picture in USD/JPY remains bullish according to the daily chart, with the market still eyeing the big target at 125.00 handle.

Key Quotes

"The USD/JPY pair broke above its 2007 high this week, advancing up to 124.45 and holding above the 124.00 figure, following a technical breakout. The pair has been trapped in a tight range for almost two months, finally advancing after FED's chair Yellen reaffirmed her commitment to rise US rates this year, increasing the imbalance between both Central Banks."

"The technical picture is bullish according to the daily chart, with the price advancing sharply above its 100 SMA and the technical indicators maintaining a strong bullish tone, despite being in extreme overbought levels. However, the 4 hours chart shows that the Momentum indicator diverges sharply lower and approaches its mid-line, whilst the RSI indicator hovers around 67, showing no directional strength. In this last chart, the price is far above its moving averages that have now become insignificant for intraday traders."

"The market has been targeting the 125.00 level ever since the year began, which means the level will be critical, as if reached, the market may finally profit and therefore trigger a strong downward correction."