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Will USDJPY Reverse the Bearish Trend ?

USDJPY is surging today as concerns over geopolitical tensions eased and investors turned their attention to U.S. consumer price data coming out at 8:30 AM EDT. Recently the Fed chair indicated that the interest rates may rise sooner if the economy continues to improve so the investors would be mainly looking at the labor market data and the Inflation data.

(USDJPY : 4 Hour Chart)

On the 4 hour chart, USDJPY seems consolidating within a descending triangle. Although a descending triangle gives a bearish outlook but the pair might also reverse this bearish trend by breaking above the falling resistance trend line. If the data beats the economist’s expectations the pair might push up above the resistance trend line. However if the data misses the expectations it will again fall back towards the key support at 101.06. The surge above the resistance trend line may seem a bullish trend on the 4 hour chart but if looking at the daily chart the trend still seems bearish.

(USDJPY : Daily Chart)

On the daily chart, there is another higher resistance trend line which will resist the pair to move above it. So even if the pair rises above the lower resistance trend line, pair will find resistance above. Therefore the gains seems limited. However the bearish trend reversal will only be confirmed when the pair will break the higher resistance trend line. Breaking below the key support at 101.06 will confirm the bearish trend.