USD/JPY – Double Bottom Pattern In Making?

Key Highlights · US dollar is likely forming an interesting pattern against the Japanese yen, which has the potential to take it higher. · A double bottom pattern is in the making for USD/JPY, with resistance around 124.20. · US Gross Domestic Product Annualized will be released by the US Bureau of Economic Analysis today, which is forecasted to decline by 0.2%. USD/JPY Technical Analysis The USD/JPY pair, after forming a short-term top around 125.80, corrected lower to trade near 122.50, where it found buyers. The pair tested the mentioned support area a couple of times, but sellers failed to break it. Now, the pair has formed a double bottom pattern on the 4-hours chart, which is likely to ignite more gains in the near term. There is a contracting triangle pattern formed on the 4-hours chart, which is acting as a catalyst for the USD/JPY pair. The pair is currently testing the triangle resistance trend line, i.e. is acting as a hurdle for buyers. It can also be seen as a double bottom resistance area, which if broken, might set the pair for another leg higher. This is not all, as the 50% Fib retracement level of the last drop from 125.84 high to 122.46 low is also sitting around the triangle resistance trend line.

USD/JPY 4 Hour Chart

Currently, the pair is trading around the 100 simple moving average (4-hours). A successful close above the same might help buyers to take the pair higher in the short term. US GDP There is a monster release lined up in the US today, as the Gross Domestic Product Annualized, which shows the monetary value of all the goods and services, will be released by the US Bureau of Economic Analysis. The forecast is of a 0.2% decline in Q1. If the outcome beats the forecast, the US dollar might gain Intraday.

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