Trade of the Day: USD/JPY

By: Dima Chernovolov

USD/JPY continues to fall inside the daily Down Channel chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 5-bar level – which is the result of the slow Initial Trend (3 bars), significant Uniformity (7 bars) and above-average Clarity (6 bars). USD/JPY is expected to fall further inside this Down Channel in line with the earlier downward reversal from the resistance area shown below.

As can be seen from the daily USD/JPY chart below, the price earlier reversed down from the resistance area located between the key resistance level 105.50 (which also reversed the price in October), 61.8% Fibonacci correction of the downward impulse from August the upper daily Bollinger Band. The proximity of this resistance area and strength of the daily downtrend increase the probability USD/JPY will continue to fall inside this daily Down Channel.