USD/JPY builds a bearish Ending Wedge, a break of 142.15 needed
Mixed and volatile trading has resulted in an Ending Wedge formation being posted on the four-hour chart. This pattern has an eventual bias to break to the downside. We can also note bearish divergence on the relative strength index (the chart makes a higher high (HH) while the oscillator makes a lower high (LH)). This will often lead to a change in trend or at least a correction to the downside.
On a move through the trend of higher lows at 142.19, the measured move target is located at 138.07.
It should be noted we have bespoke support at 140.39. With this being close to the 61.8% Fibonacci retracement level of 140.30, there is ample scope for a bounce from this support zone.
Conclusion: The Ending Wedge, with bearish divergence, offers a bearish bias. There is ample scope for a corrective bounce from 140.39, possibly to retest the breakout level of the wedge formation.
On a move through the trend of higher lows at 142.19, the measured move target is located at 138.07.
It should be noted we have bespoke support at 140.39. With this being close to the 61.8% Fibonacci retracement level of 140.30, there is ample scope for a bounce from this support zone.
Conclusion: The Ending Wedge, with bearish divergence, offers a bearish bias. There is ample scope for a corrective bounce from 140.39, possibly to retest the breakout level of the wedge formation.