- USD/JPY looks to falling wedge hurdle on the daily chart.
- US dollar eases as risk sentiment improves on Trump’s tweets.
- 50-DMA at 105.78 is the level to beat for bulls, Fed minutes eyed.
USD/JPY continues to challenge the critical resistance near the 105.80 region, as the sentiment around the major remains mixed amid broad-based US dollar retreat and rallying Treasury yields.
The market sentiment improved this Wednesday after US President Donald Trump called on for partial stimulus, asking the lawmakers to approve airline support and paycheck protection.
Therefore, the safe-haven US dollar gave back a part of its Tuesday rally while the higher-yielding Treasury yields jumped across the curve alongside the stocks. All eyes now remain on the FOMC minutes for fresh direction on the prices.
Looking at the daily technical chart, the 50-day Simple Moving Average (DMA) at 105.78 continues to limit the upside attempts in the spot.
Only a daily closing above that level will revive the bullish momentum, calling for a test of the falling trendline resistance at 106.19.
Note that the pair is ranging within a falling wedge pattern since mid-June. It’s now heading towards the wedge upside hurdle, with the 14-day Relative Strength Index (RSI) pointing north above 50.00.
Therefore, daily closing above the falling trendline resistance of 105.75 will confirm the bullish breakout, opening doors towards the downward-sloping 100-daily Simple Moving Average (DMA) placed at 106.55.
On the flip side, the 21-DMA support at 105.45 will likely ease the selling pressure, below which Monday’s low of 105.27 could be challenged.
USD/JPY: DAILY CHART
