USD/JPY Breaks Year-to-Date Highs: Rising Wedge Pattern
The USD/JPY currency pair has surged to a new year-to-date high of 141.91, driven by safe-haven flows and an increase in US Treasury bond yields. However, the pair's failure to surpass the 142.00 level could trigger a potential sell-off. The presence of a rising wedge pattern on the charts adds uncertainty to the near-term outlook, while Japanese authorities' interventions in the foreign exchange (FX) markets might influence the future direction of USD/JPY.
The USD/JPY pair experienced a notable 1% surge on Friday, propelled by a combination of safe-haven demand and rising US Treasury bond yields. This upward momentum led to the currency pair reaching a fresh year-to-date high of 141.91, recovering from its daily lows of 139.85. As of the latest update, the USD/JPY is trading at 141.85.
From a technical perspective, when examining the daily chart, it becomes apparent that USD/JPY is currently trading within a rising wedge pattern. The pair closed in close proximity to the upper trendline of this pattern, around the 141.86 mark. However, the significant resistance posed by this level could hinder further upside movement, potentially exposing the USD/JPY to selling pressure. Additionally, it is crucial to consider the possibility of Japanese authorities intervening in the FX markets, as their actions may impact the pair and create conditions for a correction.
Looking ahead, the path of least resistance for USD/JPY appears to be towards the upside. Should the pair successfully breach the 142.00 level, it would open the door for further gains, with the next notable hurdle being the high from November 22 at 142.24. Subsequently, the pair could target the psychological level of 143.00. Conversely, if selling pressure intensifies, the USD/JPY may retreat towards the support level formed by the high of May 29, now acting as a support at 140.92. Further downside movement might lead to a test of the 20-day Exponential Moving Average (EMA) at 139.40.
#ForexAnalysis #USDJPY #MarketUpdate #CurrencyTrading #TechnicalAnalysis
The USD/JPY pair experienced a notable 1% surge on Friday, propelled by a combination of safe-haven demand and rising US Treasury bond yields. This upward momentum led to the currency pair reaching a fresh year-to-date high of 141.91, recovering from its daily lows of 139.85. As of the latest update, the USD/JPY is trading at 141.85.
From a technical perspective, when examining the daily chart, it becomes apparent that USD/JPY is currently trading within a rising wedge pattern. The pair closed in close proximity to the upper trendline of this pattern, around the 141.86 mark. However, the significant resistance posed by this level could hinder further upside movement, potentially exposing the USD/JPY to selling pressure. Additionally, it is crucial to consider the possibility of Japanese authorities intervening in the FX markets, as their actions may impact the pair and create conditions for a correction.
Looking ahead, the path of least resistance for USD/JPY appears to be towards the upside. Should the pair successfully breach the 142.00 level, it would open the door for further gains, with the next notable hurdle being the high from November 22 at 142.24. Subsequently, the pair could target the psychological level of 143.00. Conversely, if selling pressure intensifies, the USD/JPY may retreat towards the support level formed by the high of May 29, now acting as a support at 140.92. Further downside movement might lead to a test of the 20-day Exponential Moving Average (EMA) at 139.40.
#ForexAnalysis #USDJPY #MarketUpdate #CurrencyTrading #TechnicalAnalysis