Friday, June 22, 2018

The Most Probable USD/JPY Scenario Is A Depreciation

USD/JPY continues developing within a relatively wide range for a fourth day now, locked between 109.50 and 110.70 and neither can it break out below the support in the zone around 109.50 and 109.80 nor can it rally and reach its target at the resistance trend line (in red) of the channel.

On the H4 time frame there is a Gartley Butterfly pattern (in red) as well as a pennant (in blue) and the pair has broken out below it.

The closest target to the downside is at 133.40 and if the pair reaches the limit of the Butterfly then the depreciation should last to 108.10 – 108.00. That is a strong support zone on the W1 time frame, so how it will develop further depends on the way the pair behaves when it reaches it.

The alternate scenario is for a direct rally to 111.50 – 111.60 (on the W1 time frame), but that scenario appears less probable for the moment.