USD/JPY Technical Analysis: 52-Week Head & Shoulders Neck Line Breaking
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USD/JPY is putting pressure on a 52-week bearish price pattern. The bearish Head & Shoulders Reversal Pattern seems to be forming as the price is breaking below the long-term price channel (blue) drawn from the 2012 extremes. Now that the price has broken below the August 24 low, the Bearish Head & Shoulder’s has price targets in the 110 zone, which is also the October 1, 2014 high. If such a move happens, the price of USDJPY should remain under the resistance point of the 26-week moving average around 121.
A fresh 1-year low in USD/JPY may see a short-term bounce, but that is where technicians can look for a strategic entry.
A popular zone to look for resistance would be around 118.10/40, which comprise of the January 13 & 19 highs respectively. Last USD/JPY Technical Update, we warned that if the head & shoulders play out, we could start to hear from the BoJ in a way we did not in 2015 that will add to the JPY volatility. This morning, word came out that an unnamed Bank of Japan official noted they were watching the JPY situation closely. If the current risk-off scenario on a global scene should advance, buying JPY against most currencies, and especially the weaker currencies would likely become the play-du-jour.
Long-Term Bearish USDJPY Head & Shoulders
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