USD/JPY Uptrend Hesitates with Rising Wedge Reversal Pattern

Dear traders,

The USD/JPY made a bullish continuation after breaking the previous top (dotted red line) but the higher high lacks momentum and strength. What is next for the USD/JPY?

4 hour chart

The USD/JPY needs a new bullish breakout above the resistance line (red) of the rising wedge chart pattern to confirm (green check) a continuation of the wave 3 (purple). A break below the 21 ema zone support, however, could invalidate (red x) the bullish wave pattern and indicate a deeper retracement.

1 hour chart

The USD/JPY could be building a wave 4 (orange) retracement as long as the price stays above the support line (blue). A break below the support (blue) invalidates (red x) the wave pattern whereas a break above resistance (red) confirms (green check) the bullish breakout towards the Fibonacci targets.

Good trading,

Chris Svorcik

The analysis has been done with SWAT method (simple wave analysis and trading)

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This article was originally posted on FX Empire

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