FX.co ★ USDJPY inside trading range forming a wedge pattern

USDJPY has formed a downward sloping wedge pattern. Price is making lower lows and lower highs in a tightening price range. Price has recently bounced off the support at 104.40 and it is possibly heading towards 105-105.30.

Green line - support

This downward sloping wedge pattern will most probably break to the upside. Why the chances are in favor of a bullish break out? Because the RSI is also making a bullish divergence. The RSI is not making lower lows as price does. In order to confirm the bullish break out, price should move above 105.35 and stay above it. This could bring price back to 108.