The USD/JPY currency pair nosedived to trade at January lows as declining US Treasury Yields weighed in. The pair has been trading within a bearish wedge over the last few weeks after performing a trend reversal in mid-April.

On Friday, the pair nosedived to hit a new multi-month low of 108.282 in the process extending the weekly losses amid pressure from risk-off trading. The USD/JPY currency pair now looks odds on to continue to trade at levels last seen at the start of the year.

USD/JPY Fundamentals Overview

The USD/JPY currency bears will be optimistic going into the next week, but on for the short-term. Towards the end of the week, the bulls could gain optimism given the expected US economic data, which could potentially turn the tide in favor of the bulls.

But before then, the bears will continue to ride on Trump’s latest tweets that suggested the US could soon begin to levy tariffs on Mexican products imported to the US. The US presided suggested a 5% levy, which the market did not take kindly judging by Friday’s events.

Next week, the US Jobs data could provide investors with a reason to be optimistic again as we begin the new month.

USD/JPY Technical Analysis (the 240-min Chart)

Technically, the USD/JPY currency pair appears to be trading within a curve that could take it towards 107.477 by mid-June. However, the current bearish move could face resistance after the pair dropped to the oversold levels on the RSI indicator.

Nonetheless, the bears will be targeting profits at around 107.945 in the short-term while the bulls will look to pounce on any rebounds by placing orders with profit opportunities at 108.588.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be trading within an ascending wedge. Initially, the wedge had a flat top, which began to converge to form a triangle at the start of this year.

As such, the pair appears to be in a long-term consolidative pattern formation with a breakout not far off. However, the trendline support appears to be holding firm after surviving Friday’s test, which was driven by a massive decline in US Treasuries.

In summary, the USD/JPY currency pair appears to have a short-term bearish bias but the bulls will claim control over the long-term. The trendline support down below looks to hold on until the next rebound kicks in.