Daily Forex Update: USD/JPY
By: Dima Chernovolov
USD/JPY recently broke the “neckline” of the daily Inverse Head and Shoulders chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this chart pattern at the 7-bar level – which is the result of the strong Initial Trend (7 bars) and average Uniformity and Clarity (both rated at the 5 bar level). USD/JPY is expected to rise toward the forecast price 114.50.
As can be seen from the daily USD/JPY chart below, the breakout of the “neckline” of this Inverse Head and Shoulders chart pattern coincided with the breakout of the powerful, multi-month resistance level 113.20, which stopped the previous sharp daily impulse wave in the middle of July. This price level is acting as strong support after it was broken. The proximity of this support level and the accelerating daily Momentum increase the probability USD/JPY will continue to rise toward the forecast price 114.50.
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