USD/JPY Technical Outlook – May 29th
- A full corrective wave has been completed in the hourly time frame for the USDJPY major currency. The technical picture has left the pair culminating in the apex of a triangle formation, indicative of a break higher or lower in the near term.
- Given the already established 4-wave flat correction in progress, the likely next direction for the spot rate is lower. However, the notion will likely be predicated on a break of the bottom triangle support – established by the ascending trendline at 79-79.33. A violation lower would activate support barriers at 79.00.
- Any upside break of the descending trendline at 80.50-80.14 will be brief given the immense amount of resistance above – making it less likely that the USDJPY will retrace to above 81.00. This failure would fall into a broader flat corrective wave, supportive of the notion that price action will continue lower.
- A major resistance barrier to keep in mind will be the 80.05 38.2% fibonacci retracement level from 81.75-80.50, which is being supported by the 81.77-80.50 descending trendline resistance.
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