Japan's economy was revitalizing in the 2nd quarter on the back of the stronger consumer spending and received an optimistic projection for the 3rd quarter. The yen rebounded from a ~105.000 low in March to a ~113.000 high in July and is currently in an uptrend on the daily chart. And despite BoJ effort to bring inflation to 2%, it remains at historical lows.
A close look onto price action in the months of July and August will reveal how price broke out of the weekly bearish resistance trendline (orange on the chart) to rally towards the 113.000 area twice. The new trend is on a 31 degrees angle and offers plenty of room for price to float onto. The nearest horizontal resistance and perhaps bulls first TP is ~114.000.
The last daily candle, however, did not close in favor of the buyers. It reached one of the two mid-trendlines and shaped into a shooting star by the end of the day. The PA could, therefore, go bearish again making a new higher low onto the lower limit of the channel. The intent is for it not to bottom lower than ~111.000 in the next two weeks so as to not create an uncertain prospect for traders.
In addition, Stoch has been in the overbought zone for the last 10 days but no divergence is in sight for now (daily chart). Perhaps, a reset is needed on lower TFs to push the price higher later on.
