- USD/JPY has trapped buyers with a false breakout above the 200-day average.
- The pair is trapped in a rising wedge pattern on the daily chart.
USD/JPY is currently trading at 108.74, representing a 24-pip loss on the daily open of 108.98.
The currency pair is losing altitude amid the moderate losses in the US index futures. At press time, the futures on the S&P 500 and Nasdaq are reporting 0.12% and 0.17% losses, respectively, as doubts have re-emerged over prospects of the US-China trade deal.
Technically speaking, the currency pair has tapped the bulls on the wrong side of the market in the last 48 hours. The pair closed above the 200-day MA on Tuesday only to fall back below the long-term MA in the overnight trade.
Also, the pair is trapped in a rising wedge on the daily chart. It comprises of converging ascending trendlines drawn from higher highs and higher lows. The converging nature of trendlines represents buyer exhaustion. Hence, a rising wedge breakdown is considered a bearish reversal pattern.
In USD/JPY's case, a close below the lower edge of the wedge, currently at 108.09, would confirm breakdown and open the doors for 106.48 (Oct. 3 low).
On the higher side, acceptance above 109.25 (Tuesday's high) is needed to revive the bullish view.
Daily chart
-637086923288363610.png)
Trend: Bearish
Technical 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.