- USD/JPY on the verge of a falling wedge breakout on the daily chart.
- Bulls eyeing a daily closing above 105.74, Powell in focus.
- Bullish daily RSI keeps the buyers hopeful above 105.50.
Having faced stiff resistance once again near 105.80 region, USD/JPY has retreated slightly while trading modestly flat around 105.70 in European trading.
Cautious optimism, amid a potential US fiscal stimulus and President Donald Trump’s discharge from the hospital, keeps the US dollar undermined against its major rivals.
Next of note for the major remains the Fed Chair Jerome Powell’s speech on the economy due later in the NA session.
From a near-term technical perspective, the bulls are gearing up strength for the next push higher, as the price teases a falling wedge breakout on the daily chart.
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.
The 14-day Relative Strength Index (RSI) points south, still trades well within the bullish territory, suggesting that there is scope for the further upside.
Alternatively, the spot could fall back towards the 21-DMA support at 105.43, below which Friday’s low of 104.93 could be tested.
USD/JPY: DAILY CHART