USD/JPY outlook: Trading right at top of wedge formation
- Break out of consolidative wedge formation (see chart) should see prices testing 101.40;
- Hedge funds have been buying heavily again over last 24 hours on divergent CB policies;
- Recent history suggests caution however as this pair has been in consolidation mode and risk-reward favours shorts with stop above .9910;
- JPY crosses starting to look bullish but no major technical breaks yet in any of major pairs.
If bears like me start getting bullish then it must be close to the top! Patience required here; if 99.10 breaks then we can start buying dips quite aggressively but otherwise its probably best to wait and see what happens. Also watch the main crosses for any significant signals.