USD/JPY Bearish Signal Provokes Correction
Dailyfx | Apr 07, 2014 11:33AM ET
- USD/JPY Technical Strategy: Sidelines preferred
- Shooting Star pattern near 104.00 receives confirmation
- 103.00 offering support as Doji suggests hesitation from bears
A Shooting Star candlestick formation is warning of more declines ahead for USD/JPY after the bearish reversal signal received confirmation from an ensuing down day. The potential for a correction is made more noteworthy by a break below a key support level at 103.50.
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Drilling down to the four hour chart; the unusually long series of Doji candlesticks near the critical 104.00 level suggested deliberation amongst the bulls. However, the long-legged Doji that has formed at the psychologically-significant 103.00 mark is a sign of hesitation from the bears, which leaves an unclear technical bias.
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By David de Ferranti, Market Analyst, FXCM
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