On Wednesday, the USD/JPY currency pair broke the lower boundary of the falling wedge pattern. During today’s morning, the pair resumed to trade within the given pattern.
From a theoretical perspective, it is likely that the exchange rate could reach the upper pattern boundary near 106.80 and then a reversal south could follow.
However, note that the pair is pressured by the 100– and 200-hour SMAs in the 106.50/106.75 area, as well supported by the weekly S1 and the 55-hour SMA near 106.35. Thus, it is likely that the pair could consolidate in the short run.
