USDJPY has been moving in a strong uptrend, with a short-term rising channel forming on its 1-hour time frame. 

Price just came off a test of resistance and may be due to head lower in a bit, offering a better entry area for buyers looking to jump in a long trade. 

Stochastic is moving towards the overbought area though, which means that buying pressure might still be enough to push for another test of channel resistance. MACD is on middle ground, barely offering any clear clues at the moment.

A selloff could lead to a test of the bottom of the channel near the 115.00 major psychological level and the 100 SMA. The short-term SMA is still moving above the longer-term 200 SMA anyway, confirming that the uptrend could stay intact. A bounce off 115.00 could lead to another test of the previous highs at 116.00 or higher.

Japanese data came in mixed earlier today, with a stronger than expected core machinery orders report and a weaker than expected PPI. As for the US, initial jobless claims are up for release, with stronger than expected data likely to boost the dollar once more.

By Kate Curtis from Trader’s Way