FX.co ★ USD/JPY: rising wedge under development

The USD/JPY pair turned to the downside in the short term. It's traded at 134.39 at writing and it has developed a potential downside reversal pattern. Still, it's premature to talk about a downside movement as the bias remains bullish.

Tomorrow, the fundamentals could move the rate. Japan is to release the SPPI and the BOJ Core CPI, while the US CB Consumer Confidence represents a high-impact event which could change the sentiment in the short term. In addition, the US Richmond Manufacturing Index and the New Home Sales indicators will be released as well.

USD/JPY Showed Overbought Signs!

Technically, the USD/JPY pair found resistance at the 61.8% retracement level and now it challenges the uptrend line. The weekly pivot point of 134.26 stands as a static support. After its current drop, we cannot exclude a false breakdown.

Personally, I would like to see a valid breakdown below the uptrend line before taking action. A downside continuation without a retest could announce only a temporary drop.

USD/JPY Prediction!

A valid breakdown below the weekly pivot point of 134.26 validates further drop and represents a new bearish signal.