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USD/JPY Rising Megaphone Top with Usual H&S Top with Usual Right Shoulder Bounce Off Wedge Bottom
The USD/JPY has such a perfect rising megaphone short set-up on its chart that I will be amazed if it doesn’t complete for a big move down.
The red rising megaphone has perfect internal structure. The classical way for these formations to complete is with a head and shoulders top that carries the price sideways to the formation bottom, and the chart shows a clear H&S. The right shoulder of the H&S is usually a bounce off the rising wedge bottom, and that’s what has happened here.
There’s nothing quirky like a megaphone right shoulder on the H&S to suggest another leg up the formation bottom–not even on the yen futures contract.
The set-up is to short on the downwards breakout through the H&S neckline and rising megaphone bottom. The target is the level of the lowest touch on the red rising megaphone bottom.
If you do see the H&S right shoulder start to megaphone after breakout, crossing and recrossing the H&S neckline, a rising megaphone may be forming to carry the USD/JPY to a higher high. Breakouts from complete rising megaphone formations should move down fast and keep moving.
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