USDJPY Market Volatility Declines as Price Fluctuates in Bullish Wedge

Market Analysis – May 29

USDJPY is currently experiencing low volatility and consolidation within a bullish wedge. USDJPY’s ability to sustain the bullish trend has been supported by multiple tests of the bullish trendline. Although short-term trends indicate reaccumulation, this could be a preparatory phase for a renewed attempt to break through the 160.40 resistance level.

USDJPY Key Levels

• Demand Levels: 151.910, 146.500, 140.800
• Supply Levels: 160.400, 165.000, 170.000

USDJPY Long-Term Trend: Bullish

In March and April, USDJPY exhibited minimal daily fluctuations despite low volatility, rising consistently. This steady increase caused the Average Directional Index (ADX) to climb above 40, indicating a strong trend.

Sudden volatility emerged as buyers required substantial energy to break out of the bullish wedge. This breakout, occurring in late May, marked the highest levels of ADX and Average True Range (ATR) for the year. The bullish breakout propelled the price to the 160.40 supply zone. Since reaching this zone, volatility and trend strength have significantly waned, as evidenced by declines in both the ADX and ATR.

USDJPY Short-Term Trend: Bearish

Recently, USDJPY has been characterized by short trading ranges. This phase may represent reaccumulation, storing sufficient energy to breach the 160.40 resistance level. Historically, prolonged periods of silent price action often precede impulsive price expansions. Prominent forex signals would likely target the last swing high of 160.40, suggesting a potential upcoming move.