The Yen Put in a Classic False Top at the Level of Previous Top Touches in its Pink and Blue Megaphones
The yen put in a classic megaphone false top today by reversing at roughly the level of the previous top touches on its blue and pink megaphones.
False tops retrace to VWAP and reverse there to melt-up to the megaphone top.
That means the yen is a strong favorite to reverse early next week into a hard move up to its pink megaphone top. Then it must retrace to the pink megaphone VWAP again. If it reverses there again, it’s heading for the blue and red megaphone tops.
Note that USD/JPY put in a mini-bounce off the bottom of its long-term rising megaphone on the daily.
USD/JPY Put in a Small Bounce Off the Bottom of Its Purple Rising Megaphone Today but the Formation is Complete
But the long-term rising megaphone (purple on chart) has completed with an H&S top and so is a strong favorite to break out downwards.
A downwards breakout would target the level of the lowest touch on the formation bottom.
Rising megaphone breakouts that fizzle tend to form sideways megaphones across the breakout level. Occasionally they will put in one last wave up, twining across the formation bottom, but not usually after an H&S top across the formation.