July 28 (Reuters) - USD/JPY remains on an upward trajectory and could be on the verge of an important break above 164.00 in coming sessions. Traders have been on intervention watch for weeks due to the yen's unabated slide, which pushed it to fresh 40-year lows against the dollar at 163.99 last week. USD/JPY left a large lower shadow on Monday's candlestick line, highlighting a rejection of the downside and increasing the likelihood of an eventual break above the new 163.99 multi-decade high. The 14-day momentum reading remains positive, reinforcing the underlying bullish market structure of USD/JPY.

There are likely good offers ahead of 164.00, some of which are for option barrier defence. If large stops clustered above 164.00 are triggered, that could lead to a bigger extension higher towards 165.00 option barriers.

However, a failure to break above 164.00 could end up putting downward pressure on this market.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)