- USD/JPY has broken out of the broadening formation pattern and is falling towards its target.
- Perhaps this pair has reversed its short-term trend and the risks are now on the downside, following a bearish bias.
USD/JPY has broken the bottom of the bearish Broadening Formation price pattern and is falling towards the first downside target of 148.54, which is a downward Fibonacci extrapolation of 61.8% of the pattern height.
USD/JPY daily chart
If it becomes more bearish, USD/JPY could reach its next target, a major swing high of 148.24 on September 2nd.
(Blue) The Moving Average Convergence Divergence (MACD) momentum indicator is moving away from the red signal line, which is another bearish sign.
Most likely, the short-term trend has reversed from bullish to bearish after the breakdown. Given that it is a principle of technical analysis that trends tend to widen, further weakness is likely in the short term.
