USD/JPY broke above the resistance trendline (in red) of a pattern which could be interpreted, with some caveats, as a triangle though not a classic one. The pair then tested the trendline it broke above and started climbing.
The move to the upside is also developing in a channel between a pair of parallel trendlines (in blue). In case the pair breaks out above the channel we could expect for it to reach the limit of the red triangle it broke above, which is at 1.1950.
In case the pair breaks below the blue channel, we could conclude that the breakout above the triangle was false and that there will be a deeper correction to the downside.
Since the pair has rallied for almost 1750 pips without a correction, we should be exceedingly careful when opening long positions.
Very helpful analysis.
ReplyDeleteIt was a false breakout after all.
ReplyDeleteThat's good to know, thanks.
ReplyDeleteGood review!
ReplyDeleteThanks for such an informative analysis.
ReplyDeleteGreat post!
ReplyDeleteValuable analysis.
ReplyDelete