USD/JPY Technical Analysis: break below 111.11 could prove costly

USD/JPY dived out of the rising wedge pattern yesterday, signaling a resumption of the sell-off from the recent high of 112.14. 

The drop, however, was cut short at 111.11 and the pair recovered to 111.40, neutralizing the immediate bearish setup. 

In the last 12 hours, the pair has carved a lower high along 111.40 and is now trading at 111.20. A break below 111.11 would revive the bearish view put forward by the rising wedge breakdown, confirmed yesterday and would open the doors to 110.75 (low of the rising wedge). 

On the higher side, a convincing break above 110.47 is needed to confirm bullish revival. That looks unlikely though as the US 10-year treasury yield fell to over two-month lows yesterday. Further, at press time, the Asian equities are reporting losses. 

Hourly chart

Trend: Bearish below 111.11