USD/JPY Price Analysis: There is a difficult broadening wedge pattern making an appearance on the hourly chart
|- USD/JPY is trading 0.18% higher on Tuesday in a mixed session for the dollar.
- The price is hovering around 107.50 which is a previous support zone.
USD/JPY 1-hour chart
The greenback is having a mixed session on Tuesday and performs well against the JPY, AUD and EUR but is struggling against the GBP and NZD. The risk sentiment in the equities market is also mixed this afternoon as the tech-heavy Nasdaq trades 0.13% higher and the Dow and S&P lag behind in the red. The USD/JPY pair is often a good measure of risk sentiment but recently the correlation has become muddled and both USD and JPY fight for safe-haven status. In the medium-term, if the US continues to struggle with the COVID-19 pandemic and the BoJ run out of policy options maybe the pair will weaken.
Looking at the chart, any broadening pattern is difficult to trade. It confirms that the market is without a clear trend-making higher highs and lower lows at the same time. The indicators are not making too much sense of the recent price action too. The Relative Strength Index is in the middle near the 50 line and the MACD histogram just popped under zero with the signal lines are above the mid-point.
Looking forward, a break of this pattern would help us determine the future path of the pair. If the pair is to break lower the wave low 107.25 a good place to start. That aforementioned level could be a support zone but if the price does break it, it could give us an indication that some more bearish price action is ahead. On the topside, the next resistance lies at 107.75 and if there is a clear break of that zone the high on the chart of 108.16 could be tested.
-637297390339029494.png){kind=link}
Additional levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.