USD/JPY technical analysis: Falling wedge and bullish MACD divergence on 4H
|- USD/JPY has created a falling wedge on the 4-hour chart.
- The MACD is reporting a bullish divergence.
A key indicator on USD/JPY's 4-hour chart is flashing early signs of a bullish reversal, however, so far, the pair has failed to pick up a strong bid.
The widely followed moving average convergence divergence (MACD) histogram has produced higher lows over the last three trading days, contradicting the lower lows on the price chart.
That bullish divergence indicates the pullback from 108.99 has run out of steam. The outlook, however, remains neutral, as the pair is still trapped in a falling wedge.
A break above 108.09 would confirm a falling wedge breakout and open the doors to a retest of 108.99. On the downside, a break below 107.80 would expose the lower edge of the wedge, currently at 107.42.
As of writing, the pair is trading at 107.94, having hit a high of 108.09 earlier today.
4-hour chart
Trend: Neutral
Pivot points
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