The pair has been rising vertically since January 27 and is up 8 days in a row, bolstered by rising US yields and a dollar short squeeze.
The pair is now testing a key resistance of 105.70, where the pair shot up after the elections in November. If this level is cleared out, the greenback could continue higher, targeting October highs of 106.10.
Alternatively, the support now seems to be around 105.60, and if not held, the pair could decline to today's lows of 105.30. Another major support could then be located at 105.0, and as long as the USDJPY pair trades above that level, the medium-term outlook seems bullish.
The long term trend for the USD remains bearish; however, considering the greenback is the most shorted in ten years, a huge short-term squeeze has probably already started.
