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With not a lot of major data on the docket, I’m setting my sights on a possible wedge on USD/JPY’s chart.

Do you think the pair can sustain an upswing?

Before we talk chart levels, lemme show you the biggest headlines from the Asian session:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • Germany’s final CPI and WPI at 6:00 am GMT
  • U.S. initial jobless claims at 12:30 pm GMT

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

Earlier today we saw the dollar take hits against its higher-yielding counterparts as risk-takers take cues from a positive U.S. session trading.

In USD/JPY’s case, the anti-dollar sentiment translated to the pair finding resistance at the key 107.00 psychological handle.

Will the bounce motivate enough bears to drag the pair lower? Take note that USD/JPY is trading in a potential wedge with an ascending trend line support hanging near the 100 and 200 SMAs.

Momentum traders can take advantage of the dollar weakness and aim for the trend line support around the 106.50 zone.

But if we see positive news about the U.S. initial jobless claims or the stimulus deal that lawmakers are working on, then we could see USD/JPY retest the 107.00 – 107.50 area of interest.