USDJPY and a possible Head and shoulders pattern.

Με το βλέμμα του Γερακιού σε ΔΕΗ, ΟΠΑΠ, ΕΛΛΑΚΤΩΡ και στην τάση του ΧΑ
October 24, 2016
Τα πρώτα σημάδια….
October 25, 2016

USDJPY has many chances of a bearish reversal and a pull back towards at least 101.50 from current levels. Why am I bearish USDJPY? Technically in the weekly chart price is found near the upper triangle boundary and very close to resistance by the kijun-sen (yellow line indicator). A rejection here according to my bearish scenario will at least bring price towards the lower triangle boundary.

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In the daily chart we observe bearish divergence signals while price making higher highs, the RSI does not follow. Moreover a break above the Ichimoku cloud could be a false breakout, so a test of the lower cloud boundary near 102.20 cannot be ruled out.

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Zooming in at the 103-104 trading range of the last few sessions we observe a possible head and shoulders bearish pattern with the neckline support at 103.30. This neckline if broken will give me a short-term target of  101.60.

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I’m bearish USDJPY and I believe JPY will strengthen over the coming weeks. Thank you for taking the time to catch up on my thinking.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.