Last Friday (8/26), Fed chair woman Janet Yellen spoke at Jackson Hole about the forumula(s) the FOMC follow to set interest rates, albeit being reluctant to follow it strictly:"it involves four variables: so-called R-star, which is the longer-run normal value of the federal funds rate adjusted for inflation; the four-quarter moving average of core PCE inflation; the FOMC’s target for inflation; the unemployment rate and the longer-run normal rate of unemployment." (Marketwatch.com)At the end of the day, the market felt that Mrs. Yellen was a bit hawkish, opening the door to a rate hike, likely in December. This has been the market rhetoric of late - a December rate hike, and the speech did not derail these expectations. The economy has somewhat improved, prompting a stronger case for a rate hike. Yellen said, "in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," (Nasdaq.comI have my doubts, but the important thing is that the market is buying into the hawkish lean and buying up the USD. The USD/JPY for example has been consolidating at and just above 100.00 for a couple of weeks before taking off like a rocket.USD/JPY 4H Chart 8/29(click to enlarge)Bullish breakout:- The 4H chart shows the USD/JPY breaking out of its consolidation.- This is a reversal in the short-term, but really just part of a medium-term consolidation between roughly 99 and 107.50. Upside; resistance:- In the near-tern, there might be some resistance around 102.50, which provided resistance a couple of times earlier in August.- Above that, there is a support/resistance pivot area between 103.50 and 104. This is also the "central pivot" of the overall range and is a viable target. - An aggressive target would be a support/resistance pivot at 105.50.- The most aggressive target for now should be 107.50 which was the July high. Trading strategy:- In the short to medium-term, I think there is bullish bias. - With this bias, it could be prudent to buy on dips.