USD/JPY is testing the critical support zone (green box) on the weekly chart. Price has already made a bullish bounce. Can the USD/JPY make a reversal?
The USD/JPY is testing the critical support zone (green box) on the weekly chart. Price has already made a bullish bounce. Can the USD/JPY make a reversal?
The USD/JPY bears have been in control for a while, but the entire chart pattern seems to be a contracting triangle. The previous low is estimated to be a wave C (purple), which means that price action is expected to build a bullish ABC (orange) within wave D (purple). Any break below the bottom of wave C invalidates (red x) the development of Wave D now but not the entire triangle. A bullish bounce at the support zone could confirm the upside as well as a break above the local resistance (orange box).
The daily chart is building a bearish trend channel. The breaks below the 21 ema and red SWAT candles with the long-term trend (price is below long-term emas) provided plenty of movement lower. But now price action could be running out of steam at the Wizz 8 target zone. A potential inverted head and shoulders (blue boxes) could emerge as a reversal chart pattern. Price will need to break to confirm the reversal. In that case, price action could complete wave B (orange) and start wave C (orange).
Good trading,
Chris Svorcik
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter
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Chris Svorcik is co-founder, trader, and analyst with Elite CurrenSea (www.EliteCurrenSea.com) since 2014.