Forex Strategy: USD/JPY Hanging Man Prompts Drift Lower For Yen
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- USD/JPY Technical Strategy: Hanging man amidst uptrend leaves mixed technical bias
- Longs preferred on correction lower and sign of renewed buying support
- Drift lower represents small correction within the context of a broader uptrend
The target offered in yesterday’s candlestick report of 102.63 was hit in recent trading, and followed the formation of a Hammer formation near key support at 102.00. However, a drift lower in USD/JPY over the trading session has arisen following the formation of a Hanging Man at the 102.63 resistance level. The candle pattern suggests buyers may have lost their hold on prices as a period of gains over recent days’ trading prompts profit taking.
However, a continued series of higher highs and higher lows on the four hour chart suggests that the short term uptrend remains intact. As such, exercising a degree of caution is suggested when looking at capitalizing on this most recent bearish reversal candlestick formation. A correction towards the 102.00 handle may offer renewed buying support for the pair and favor new long entries.
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Four Hour Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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