USD/JPY: Possible Head-And-Shoulders
Alexandros Yfantis | Oct 24, 2016 06:21AM ET
USD/JPY has many chances of a bearish reversal and a pull back towards at least 101.50 from current levels. Why am I bearish USD/JPY? 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 toward the lower triangle boundary.
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.
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.
I’m bearish USD/JPY and I believe JPY will strengthen over the coming weeks. Thank you for taking the time to catch up on my thinking.
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