FxWirePro: USD/JPY extend trendline breakout, outlook bullish

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading largely muted on the day at 116.02, after closing 0.40% higher in the previous session

Previous Week's High/ Low: 115.59/ 114.14

Previous Session's High/ Low: 116.33/ 115.45

Fundamental Overview:

Red-hot U.S. inflation data and hawkish Fed comments fueled bets on aggressive U.S. interest rates hikes, boosting the US dollar.

Data on Thursday showed U.S consumer prices surged 7.5% in Jan on a year-over-year basis, beating estimates of 7.3% and marking the biggest annual increase in inflation in 40 years.

Further, St. Louis Federal Reserve Bank President James Bullard said the data had made him "dramatically" more hawkish.

Technical Analysis:

- USD/JPY is extending break above 'Symmetric Triangle' top

- Bearish RSI divergence on the weekly charts keeps scope for downside

- Momentum is still bullish, MACD supports bullishness, ADX favours gains

- GMMA indicator shows major and minor trend are strongly bullish

Major Support and Resistance Levels:

Support - 115.62 (5-DMA), Resistance - 116.66 (88.6% Fib)

Summary: USD/JPY trades with a bullish bias. Scope for test of 88.6% Fib at 116.66.