Daily Forex Update: USD/JPY
By: Dima Chernovolov
USD/JPY continues to fall inside the uniform Down Channel chart pattern which was previously identified by Autochartist on the daily charts. Autochartist rates the quality of this Down Channel at the 5-bar level – which is the result of the slow Initial Trend (2 bars), above-average Uniformity (6 bars) and higher Clarity (7 bars). USD/JPY is expected to rise further inside this Down Channel – in line with the earlier breakout of the key support level shown below.
As can be seen from the daily USD/JPY chart below, the price earlier broke through the key support level 105.40 (which has been reversing the pair from the middle February). This price level is acting as resistance after it was broken. The proximity of this resistance level and the strength of the daily downtrend increase the probability USD/JPY will continue to fall inside this Down Channel.
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