The USD/JPY chart is actually looking surprisingly bearish after forming a head-and-shoulders pattern on the 4-hour chart.
The pattern is not perfect as volume should ideally be lower on the right shoulder but its still is quite compelling.
A break below the neckline at around 123.60 – including a 10 point margin of confirmation – so below 123.50 would probably see the pattern full-fill its down-side minimum price objective at 122.65.
Alternatively given the dominant up-trend and the fact the pattern does not exhibit weak volume, it may be a 'fake', as sometimes occur in the middle of strong trends. If this is the case then a break above the right shoulder at 124.55 would cancel it out and could lead to a short-covering rally to a target at 125.00.
Then after a break above 125.20 I would expect to see an extension of the trend to the R1 monthly pivot at 126.05.
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USD/JPY: Head-And-Shoulders Pattern Threatens Mini-Reversal
Published 06/04/2015, 07:59 AM
Updated 07/07/2019, 08:10 AM
USD/JPY: Head-And-Shoulders Pattern Threatens Mini-Reversal
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