USD/JPY Pullback Leaves Bearish Engulfing Pattern Awaiting Validation
- 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.
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
Four Hour Chart - Created Using FXCM Marketscope 2.0,Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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