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USD/JPY Staying In The Descending Channel

USD/JPY Staying In The Descending Channel

2017-05-04 15:40:00
Oliver Morrison, Analyst
Share:

Position: Short USD/JPY

Entry: At market, 112.74 at the time of writing

Stop – 113.00 (the top of the descending channel).

Target 1 - 112.655, which is the close of the previous day.

Target 2 – the bottom line of the descending channel

Timeframe – Few days - Few weeks

Would you like to know more about trading the financial markets? DailyFX’s trading guideshould be your first stop.

USD/JPY has been declining since the start of the year and we can clearly see a parallel descending channel on daily charts. Over the past two weeks, however, USD/JPY has rallied back to this descending channel’s resistance.

The Dollar’s recent rally inspired by the hawkish tone of yesterday’s FOMC meeting has lifted the pair to the top of this channel at the 113.00 area.

But the price has failed to rally above the channel and is sliding once again towards the bottom of the channel, presenting a shorting opportunity. A break out of the channel would have signaled a trend change.

Chart 1: USD/JPY Daily Timeframe (December 2016 to May 2017)

USD/JPY Staying In The Descending Channel

Chart by IG

--- Written by Oliver Morrison, Analyst

To contact Oliver, email him at oliver.morrison@ig.com

Follow Oliver on Twitter @OPWMorrison

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