• USD/JPY is declining within a potential bearish reversal pattern. 
• Called a “Broadening Formation” such a pattern would have downside implications for price. 

USD/JPY looks like it is falling within an evolving bearish Broadening Formation price pattern (see chart below). 

If this is the case, then the pair is likely to eventually decline towards the lower boundary line of the pattern at around 151.50. After that, it could even break below that line and decline to the projected target for the actual Broadening Formation (BF) itself, at around 148.54.

USD/JPY Daily Chart 

The (blue) Moving Average Convergence Divergence (MACD) is moving lower after crossing below the red signal line – a bearish indication. 

USD/JPY overshot the upper boundary line of the BF on November 14 before quickly falling back down inside it on the following day. This could was probably a sign of exhaustion and is a sign of a coming reversal on the horizon.

That said, it is also possible the pattern could be false. If so, USD/JPY would still be in a strong medium-term uptrend, and given the technical analysis principle that “the trend is your friend” the odds would favor more upside. 

In such a case, a break above 156.25 would likely confirm further gains towards a target at around 157.86 (July 19 high). 

Another possibility is that the major trendline could provide support for price in the 152.90s, slowing its decline to the lower boundary line of the BF.