FX.co ★ Symmetrical Triangle On USD/JPY

USD/JPY moves sideways on the H4 chart, a valid breakout from this chart pattern will bring a trading opportunity and will show us a clear direction. The pair could increase further if the Dollar Index and the JP225 will climb higher.

The price action has signaled that the corrective phase could be finished and that another bullish movement could develop, but we still need confirmation before we go long. The Yen will be affected if the stock market increase in the upcoming period, so if the COVID-19 pandemic subsides, the pair should climb way higher.

You can see that the USD/JPY has developed a chart pattern after the failure to reach and retest the inside sliding line (SL) of the descending pitchfork. It has come back above the median line (ML), the 38.2% level and above the Pivot Point (107.65), but only a valid breakout above the triangle's resistance will validate a further increase.

The failure to reach the SL (descending dotted line) has signaled that we may have also a double bottom pattern at 107.00 psychological level, this pattern will be confirmed after a valid breakout above the 23.6% level and above the weekly R2 (109.25) level.

A further drop and a larger correction will be confirmed only after a downside breakdown and below the inside sliding line (SL) and the 50% level.

• TRADING TIPS

A consolidation above the PP (107.65), 38.2% retracement level and above the median line (ML) followed by a valid breakout from the symmetrical triangle will give us a chance to buy USD/JPY with an upside potential target at the upper median line (UML).

USD/JPY has signaled that the sellers are exhausted after the failure to approach and reach the sliding line (SL) again. We can go short again only if USD/JPY will make a valid breakdown below the sliding line (SL) and below the 50% level, so only a downside breakdown from the minor pattern will not be enough.