By: Dima Chernovolov
USD/JPY continues to fall inside the hourly Down Channel chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this Down Channel at the 8-bar level – which is the result of the strong Initial Trend (7 bars) and significant Uniformity and Clarity (both rated at the 8 bar level). USD/JPY is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the powerful resistance zone shown below.
As can be seen from the daily USD/JPY chart below, the top of this Down Channel formed when the price reversed down from the major resistance area lying between the multi-month resistance level 114.40 (which has been reversing the price from May) and the upper daily Bollinger Band. The proximity of this resistance area adds to the probability USD/JPY will continue to fall inside this Down Channel.
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