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​Will USDJPY now Pause its Rally?

US dollar today lost some ground against Japanese Yen after the release of the ADP national employment report. According to the report the private sector employment increased by 213K from the reading of 202K in August to September on a seasonally adjusted basis and above the expectations for an increase of 210K.

USDJPY : Hourly Chart

On the hourly char, the pair seems like following a rising wedge pattern which gives a bearish signal. After the release of ADP employment change report it declined from the resistance trend line of the wedge and currently testing the support from the support trend line of the wedge. According to the trend the pair should decline below the rising support trend line. However the 50 day SMA is also acting as support. If the pair is not able to hold above the support trend line and 50 day SMA, the nearest support it may find is at 109.48.

On the other hand I think the demand for continue to be supported as investors are expecting early interest rate increase from Fed. If the pair breaks above the rising wedge, the bearish signal will fade away. Key data for which investors are currently waiting is Non Farm Payroll data releasing tomorrow and might help the pair in rallying if beats the economists expectations.

USDJPY : Daily Chart

On the daily chart, it is trading within a narrow rising channel and therefore might decline from the resistance trend line before rising further. Long term trend seems to be uptrend but as we saw on the hourly chart, there might be some losses before rally.