By IFCMarkets
Hello to all traders out there. Today we are going to talk about the US dollar against the Japanese Yen trading pattern. As you can see at the chart the currency pair has formed a potential descending triangle which according to theory is a bearish trading pattern. However, it could just be a range trading formation and with upside breach would return to rising structure. Downward break out of the support at 100.77 would confirm the descending triangle therefore we would watch its trading closely and should that happen then falling chances will increase.
Nevertheless, at current trading the USDJPY remains in a trading range and that suggests continuation of sideways between 102.80/100.77. Any penetration of the upper barrier or the lower boundary might show the prevailing direction, but we should cautious for fake breaks.
The Oscillators are mostly in neutral status since the prices are in a tight trading range. The only indicator that gives some hope is the Bollinger band which is very tight and that suggests we would see a break out soon. In our view, we consider that chances favor downside break out given the likely descending triangle but we would expect to see a falling penetration of 100.77 before we follow. Also lower risk reward ratio is required because a “bear trap” is usual in this kind of trading patterns.
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