USD/JPY Technical Analysis: Corrective rally likely after upside break of the falling wedge pattern
|- The bullish divergence of the relative strength index (RSI), as seen in the hourly chart, indicates the pair could take out falling wedge resistance in the next couple of hours.
- Falling wedge bull reversal, if confirmed, would allow a stronger rally toward 111.13 (50-hour moving average).
- The bulls need progress soon as the pair is already trading below the all-important 50-day moving average of 110.88. A daily close below that level would confirm a bull-to-bear trend change, that is, the rally from the March low of 104.63 has ended.
Hourly chart
Spot Rate: 110.81
Daily High: 111.00
Daily Low: 110.71
Trend: Bullish above 110.87 (wedge resistance)
R1: 110.87 (top end of the wedge)
R2: 111.13 (50-hour moving average)
R3: 111.30 (10-day moving average)
Support
S1: 110.72 (daily pivot support 1)
S2: 110.59 (July 26 low)
S3: 110.28 (July 4 low)
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