- USD/JPY surged to a YTD high of 141.91, although failure to break 142.00 could trigger a selloff.
- A rising wedge pattern is causing uncertainty as USD/JPY nears key resistance.
- Japanese foreign exchange intervention may affect the future direction of USD/JPY.
USD/JPY they soared more than 1% on Friday on safe-haven flows and a jump in U.S. Treasury yields. On its way north, USD/JPY hit a new yearly high (YTD) of 141.91 after rebounding from daily lows of 139.85. At the time of writing, USD/JPY is trading hands at 141.85.
USD/JPY Price Analysis: Technical Outlook
USD/JPY ended the week on a higher note but faced solid resistance as shown on the daily chart. The major is trading within a rising wedge and USD/JPY closed near the top trend line around 141.86. A failure to overcome breakout resistance and push prices above 142.00 would expose USD/JPY to selling pressure. In addition, language interventions by Japanese authorities in foreign exchange markets could weigh on the pair and open the door for a correction.
With USD/JPY path of least resistance to the upside, the pair’s first ceiling would be 142.00. A break above will reveal the November 22 high at 142.24 before reaching 143.00. Conversely, USD/JPY could dive to the May 29 high inverted support at 140.92 and then decline to the 20-day EMA at 139.40.