FOREX Chart Of The Day: USDJPY What Next?

USDJPY could be forming a key reversal pattern on the daily time frame after closing bullish on the weekly. Will the market rally or will it fall?

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USDJPY- Weekly Time Frame

The weekly timeframe on USDJPY has formed a strong bullish close, this suggests that the price could continue moving higher into the next week from key areas of support and resistance.

Looking at the modified Fibonacci tool on Metatrader we can see that the 50% retracement lines up with the previous weekly highs. This adds confluence to a potential zone of interest for the market to find support.

Strong bullish closes on the weekly time frame can offer opportunities for traders going into the next trading week, keep an eye on the weekly close and where they form to spot potential trend trading opportunities. 

USDJPY- Daily Time Frame

As we can see on the daily time frame the price could be forming an inverse head and shoulders pattern. This would cement the idea of a weekly impulse phase starting as this would be a higher low on the daily time frame. If a higher low occurs at the 50% retracement we can start to look for long opportunities mid to long term.

This type of trading opportunity would be suited to a swing trading strategy as this opportunity could last a few days. 

If we are anticipating a move down to the support we can look for short term trading opportunities down to the level before looking for a reversal.

USDJPY- 4hr Time Frame

The 4hr time frame for USDJPY is forming a bearish trend with the price breaking into new lows, this could offer a short term trading opportunity if the price was to form a rejection of the lows in line with this time frame trend.

If the price then gets back to the support we could look for buyers to step back in to the market in line with the bigger picture outlook. Look for reversal patterns at this support on the 4hr time frame for clues to whether the daily timeframe trend will reverse and rally.

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