USD/JPY Continues Moving Within A Wide Consolidation

The attempts to move to the upside at the moment are completely in vain and after every small rally there’s a new drop.

The moves to the downside aren’t particularly convincing either and for a month and a half now the pair has been moving within a wide consolidation between 115.60 and 111.60.

The patterns formed by the trend lines (on the H4 and daily time frame) around the moves to the downside suggest the formation of a wedge (in red) and another, smaller wedge on the smaller time frames (in blue). The critical zone is around 110.80 – 110.40, which is 50% Fibo of the impulse move to the upside from 9th November 2016 to 15th December 2017 (101.190 – 118.660).

It is obvious that the move to the downside is corrective and in my opinion we should be very careful when it reaches the above-mentioned zone around 110.80 – 110.40.

I think it is too early to expect a breakout and to look for a possible limit of those patterns, but we should follow their development closely in order to react on time.