USD/JPY breaks consolidation phase, good to go long

FX:USDJPY   U.S. Dollar/Japanese Yen
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USD/JPY             saw a robust recovery in early Asia as ongoing chatter that Japanese PM Abe             is likely to delay sales tax hike plan by 2.5 years weighed heavily on the Yen.

Yellen’s hawkish comments delivered last Friday increased June Fed hike bets and continue to support upside in the pair.

Upbeat Asian markets which rallied on positive risk-on sentiment also dented the Yen.

USD/JPY             hit multi-week highs above the 111 handle, but has since pared some gains to currently trade around 110.94.

US markets remain closed on a Memorial Day holiday and traders likely to track sentiment across markets amidst low volumes.

US payrolls data due later this week shall be a major risk event for the pair.

On the technical side, the pair has broken its consolidation phase and has show a clear breakout above major resistance zone at 110.50-60.

Technical indicators on weekly charts support upside in the pair, gains upto 111.80 likely.

Further bullishness could see test of 112 and then 113.30 (38..2% Fib of June 2015 to May 2016 fall).

Upside finds resistance at 111.758 ( double top Mar 18th and Apr 27th), 112 and the 113.30 (38.2% Fib).

Supports are located at 110.41 (55-EMA), 110.34 (23.6% Fib) and then 110.20 (5-DMA).

Good to go long on dips around 110.80/90, SL: 110.30, TP: 111.75/112/113/113.30
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