USD/JPY Price Analysis: Bulls could be on the verge of a significant breakout

• USD/JPY could be on the verge of a bullish breakout. 
• Bears have been giving way to the bulls on the daily chart. 

USD/JPY is carving out a bullish scenario on both the hourly and daily time frames and the following illustrates the potential for a bullish breakout and bull daily extension for the days ahead. 

USD/JPY H1 chart

From an hourly perspective, USD/JPY is forming an inverse head and shoulders. On a break above the neckline around 138.50 and at what would be presumed to be a level of interest given how this area acted as the last stop before the continuation of the sell-off, the upside will be favourable. If this area holds as support on initial tests, then a daily extension could come into play:

USD/JPY daily chart

As illustrated, the daily chart has made a correction to the 61.8% Fibonacci area that has a confluence with prior highs. This could be critical support for the pair and if the hourly chart's bullish scenario plays out, then the bulls will be in the running for a significant move to the upside, potentially charting a fresh daily extension of the bullish cycle.