USD/JPY Price Analysis: Rising wedge, overbought RSI probe recovery below 133.00
- USD/JPY picks up bids to pare BOJ-inflicted losses during three-day winning streak.
- Bearish chart formation, overbought RSI conditions challenge further upside.
- Sellers need validation from 50-HMA before targeting fresh multi-month low.
USD/JPY grinds near intraday high surrounding 132.80 as it consolidates the Bank of Japan (BOJ) induces losses during the three-day recovery amid early Friday.
In doing so, the Yen pair seesaws near the upper line of a short-term rising wedge bearish chart formation. Also keeping the sellers hopeful are the overbought conditions of the Relative Strength Index (RSI), located at 14.
However, the 50-Hour Moving Average (HMA) near 132.15 acts as an extra downside filter, in addition to the stated wedge’s support of around 132.35, to challenge the USD/JPY bears.
In a case where the USD/JPY price breaks the 132.15 HMA support, the odds of witnessing a slump toward the recently flashed four-month low near 130.55 can’t be ruled out.
Following that, the theoretical target of the rising wedge, near the 130.00 psychological magnet, will be in focus.
Meanwhile, the aforementioned wedge’s top line restricts immediate USD/JPY advances near 132.85, a break of which could quickly recall the 133.00 round figure to the chart.
Though, Tuesday’s swing high near 133.70, marked during the early European session, becomes crucial for the USD/JPY bulls to watch afterward.
Overall, USD/JPY appears to fade the recovery momentum and hence bears should lookout for entries.
USD/JPY: Hourly chart
Trend: Pullback expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
