USD/JPY Price Analysis: A descending-wedge suggests a pullback before resuming upwards

• The USD/JPY is upbeat, but a descending wedge indicates that a downward move lies ahead.
• Despite broad US Dollar strength, the USD failed to capitalize vs. the Japanese yen.
• USD/JPY may print a leg-down before resuming towards new YTD highs.

On Monday, during the North American session, the USD/JPY slides some 0.05%. At the time of writing is trading at 115.13. The market sentiment is mixed, as portrayed by US equity indices fluctuating between gainers/losers.

In the meantime, the US Dolla Index, a gauge of the greenback’s value against a basket of its peers, is up 0.09%, sitting at 05.57. In the meantime, the US 10-year benchmark note retreats from earlier gains slump one and a half basis points, down to 1.916%, a headwind for the USD/JPY, which has a strong positive correlation with it.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is upward biased from a technical perspective. The daily moving averages (DMAs) reside beneath the spot price, suggesting the previous-mentioned. Nevertheless, the possibility of another leg-down before resuming towards YTD highs and above may be on the cards due to a descending wedge formation.

A double-top appears to be formed in the near term, but it would need a daily close below the neckline, located at 114.14, to confirm its validity. In that event, the first support would be the 100-DMA at 113.76. Breach of the latter would target the bottom trendline of a descending wedge, around 113.40.

In that outcome, a move towards 114.00 would open the door for further gains. The next resistance would be February 2 daily low, support-turned-resistance at 114.14, followed by the 50-DMA at 114.48, followed by the downslope-trendline from the descending-wedge, around 115.30.