Forex Strategy: USD/JPY Bearish Reversal Signal Provokes Correction
- USD/JPY Technical Strategy: Sidelines preferred
- Shooting Star pattern near 104.00 receives confirmation
- 103.00 offering support as Doji suggests hesitation from bears
A Shooting Star candlestick formation is warning of more declines ahead for USD/JPY after the bearish reversal signal received confirmation from an ensuing down day. The potential for a correction is made more noteworthy by a break below a key support level at 103.50.
USD/JPY: Bulls Retreat Following Test of 104.00
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart; the unusually long series of Doji candlesticks near the critical 104.00 level suggested deliberation amongst the bulls. However, the long-legged Doji that has formed at the psychologically-significant 103.00 mark is a sign of hesitation from the bears, which leaves an unclear technical bias.
USD/JPY: Doji Near 103.00 Highlights Indecision Amongst Traders
Four Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.