Friday, December 08, 2017

The USD/JPY Double Top Is A Signal For A Possible Correction

The US NFP data for November did not lead to any significant turbulence on the market and the movements it caused were around 40-50 pips within the expected corrections of the main currency pairs.

My favourite pair, USD/JPY, which I follow very closely, formed a correction of 46 pips, but right after that the pair rebounded to test its last high at 113.589.

The last closed H1 bar reached a high at 113.587, i.e. just two ticks below the previous one.
I think we could say that we’re observing a classical double top called “Adam and Adam”. At the same time on the H1 time frame we can see a RSI divergence, which, if it reaches its limit, could lead the pair to 112.60.

Of course, it is a good idea to wait for the current H4 time frame bar to close so there will be a confirmation of the double top. Not to mention that today being Friday and the end of the market week I doubt there will be any significant movements. However, next week I expect a correction to the downside for liquidity gathering purposes and then a test of 113.90 and 114.70.