Daily Forex Update: USD/JPY

By: Dima Chernovolov

USD/JPY continues to fall inside the clear Down Channel chart pattern which was recently identified by Autochartist on the 4-hour charts. Autochartist rates the quality of this Down Channel at the 5-bar level – which reflects the slow Initial Trend (4 bars), lower Uniformity (3 bars) and near-maximum Clarity (9 bars). USD/JPY is expected to fall further inside this Down Channel – in line with the earlier breakout of the powerful support level shown below.

As can be seen from the daily USD/JPY chart below, the pair earlier broke though the major support level 108.30 (which previously reversed the price with the daily Bullish Engulfing patterns in April and in August). This price level is acting as the strong resistance level after it was broken.  The proximity of this resistance level increases the probability USD/JPY will continue to fall inside this Down Channel.

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