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MTrading Team • 2024-05-27

USDJPY retreats within rising wedge on US holiday, inflation clues eyed

USDJPY retreats within rising wedge on US holiday, inflation clues eyed

USDJPY snaps a three-day winning streak early Monday even as markets lack momentum amid holidays in the US and the UK. In doing so, the Yen pair pares the previous weekly gains as mixed concerns about the Bank of Japan’s (BoJ) next move join a cautious mood ahead of this week’s key inflation clues from Japan and the US.

It should be observed that the USDJPY pair’s latest pullback takes place from the resistance line of a three-week-old rising wedge bearish chart pattern. The retreat also gained support from the RSI (14) line’s fall from the overbought territory and the bearish MACD signals, which in turn suggests a continuation of the quote’s latest declines toward the 156.00 threshold. However, a convergence of the stated wedge’s bottom line and the 200-SMA, near the 155.25-15 region, closely followed by the 155.00 round figure, will be strong support for the bears to conquer before taking control. Should the pair remain weak past 155.00, a five-week-old rising support line near 152.6 and the monthly low of near 151.85 will be in the spotlight.

Meanwhile, the USDJPY pair’s fresh recovery needs a clear rejection of the rising wedge bearish chart pattern by crossing the 157.30 immediate hurdle. Even so, the monthly high near 158.00, the 160.00 threshold, and the recent peak of near 160.20, as well as the year 1990 top surrounding 160.40, will offer intermediate halts during the quote’s further run-up.

Overall, USDJPY is likely to witness a pullback in prices but the downside remains elusive beyond 155.00.

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