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USD/JPY Bearish Engulfing Pattern Warns Of Weakness

USD/JPY Bearish Engulfing Pattern Warns Of Weakness

David de Ferranti, Currency Analyst

Talking Points

  • USD/JPY Technical Strategy: Sidelines Preferred
  • Bearish Engulfing Pattern Finds Confirmation
  • Close Below 108.00 Floor May Open 107.00

USD/JPY is at a critical juncture as the confirmation of a Bearish Engulfing formation warns of a deeper setback for the pair. A close under the 108.00 floor would be required to open the next leg lower to the 107.00 barrier.

USD/JPY: Bearish Engulfing Pattern Receives Confirmation

USD/JPY Bearish Engulfing Pattern Warns Of Weakness

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

The four hour chart paints a less discouraging picture for the pair. A Harami candlestick pattern offered an early indication of an intraday rebound. While a Doji suggests some waning momentum a correction over the session ahead is made questionable by an absence of key reversal signals.

USD/JPY: Harami Heralded Intraday Rebound

USD/JPY Bearish Engulfing Pattern Warns Of Weakness

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

By David de Ferranti, Currency Analyst, DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.