Daily Forex Update: USD/JPY
By: Dima Chernovolov
USD/JPY continues to fall inside the 4-hour Down Channel chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this Down Channel at the 6-bar level – which is the result of the slow Initial Trend (3 bars), above-average Uniformity (6 bars) and significant Clarity (7 bars). USD/JPY is expected to fall further inside this Down Channel – in line with the earlier breakout of the strong support area shown below.
As can be seen from the weekly USD/JPY chart below, the price earlier broke through the support area lying between the key support level 110.20 (which reversed the price earlier this month) and the 50% Fibonacci correction of the sharp upward impulse from last September. This price area is acting as resistance zone after it was broken. The proximity of this resistance zone increases the probability USD/JPY will continue to fall inside this Down Channel.
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