USD/JPY Price Forecast: Break Out Fails To Follow-Through, Trend Ambiguous
USD/JPY broke down and out of its Rising Wedge pattern on Friday but has since recovered and returned back inside.
The trend is at a delicate point and it is ambiguous. It is possible that the uptrend could be resuming and pushing price back up in a “last hurrah”.
USD/JPY 4-hour Chart
(Click on image to enlarge)
Alternatively, the bearish divergence between the Relative Strength Index (RSI) momentum indicator and price (red dotted lines) when comparing the October 16 and 21 lows is indicative of underlying bearish pressure, which, in turn, could suggest the pair could roll over and begin weakening again.
A break below the 149.09 low formed after the breakout would provide confirmation of more weakness and a change in the short-term trend. This would probably lead to a target at 148.40 as a minimum, which is the 61.8% Fibonacci extrapolation of the height of the wedge lower.
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