USD/JPY Technical Analysis: Off lows, eyes two-week highs above 109.20

The USD/JPY pair risks printing two-week highs above 109.20, as the recovery from the session low of 108.83 to 109.00 reinforces the bullish view put forward by the contracting triangle breakout.

Bank of Japan's Kuroda was out on the wires a few minutes ago, calling for scrutiny of effects and costs of the unconventional policy. However, with inflation well short of the 2 percent objective, the central bank has little room to scale back stimulus.

4-hour chart

The pennant breakout seen in the above chart indicates that the rally from the recent lows below 105.00 has resumed.

Validating that bullish view is the pair's break above the 55-candle exponential moving average (EMA) hurdle and the relative strength index (RSI) of 60.00.

The pair, therefore, looks set to print two-week highs above 109.20. The bullish setup would be invalidated if prices fall back inside the contracting triangle pattern.

Trend: Bullish