USD/JPY – The Moment Of Truth Is Coming

There is certainly some amount of humour in that title, because those who are tempted to trade this pair are without a doubt waiting with trepidation to see what will happen next.

The breakout above the red resistance trend line turned out to be false, at least for the moment.

On the D1 and H4 time frames one can clearly see that the pair has reached a critical level of its drop from 114.494 to the support trend line at 109.557. Together with that the pair further developed the figure that some analysts said was a triangle, others – a wave B…

For now the common expectation is that the pair should reverse around this level and start rallying. A breakout below the trend line and a drop below 108.128 would mean that our expectations for a rally were in vain and the pair would keep dropping.

We already know the alternate scenario involving a rally, so I won’t be focusing on it.