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USD/JPY Pullback Leaves Bearish Engulfing Pattern Awaiting Validation

USD/JPY Pullback Leaves Bearish Engulfing Pattern Awaiting Validation

David de Ferranti, Currency Analyst

Talking Points

  • USD/JPY Technical Strategy: Sidelines Preferred
  • Awaiting Confirmation Of A Bearish Pattern
  • Close Below 108.50 Floor May Open 107.00

USD/JPY’s stumble has left a Bearish Engulfing formation in its wake. If confirmed by a successive down-day the reversal candlestick pattern would warn of a further correction for the pair. Yet amid the presence of a sustained uptrend the scope for declines may be limited. A close under the 108.50 floor would be required to open the next leg lower to the 107.00 barrier.

USD/JPY: Climb Falters As A Bearish Pattern Warns Of Weakness

USD/JPY Pullback Leaves Bearish Engulfing Pattern Awaiting Validation

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

A Harami candlestick pattern on the four hour chart offered an early warning for a potential pullback. A rebound over the session ahead is made questionable by an absence of bullish reversal signals.

USD/JPY: Harami Heralded Intraday Drop

USD/JPY Pullback Leaves Bearish Engulfing Pattern Awaiting Validation

Four Hour Chart - Created Using FXCM Marketscope 2.0,Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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