Green line- wedge pattern
Blue line- bearish RSI divergence
USDJPY is trading around 149. Price has broken out of the wedge pattern and as we mentioned in a previous post, this is the time for a pull back. USDJPY has provided a sign of weakness by breaking the wedge pattern to the downside and combined with the bearish RSI divergence, we give many chances of a strong pull back. Our view remains neutral USDJPY if not bearish. Upside potential we believe is limited while to the downside there is a lot of room for a pull back. Our primary pull back target is between 146-145. USDJPY bulls need to be very cautious. A break below recent low of 147.37 will open the way for a move towards 146-145.
