USDJPY has returned to the consolidation price area where price action tends to become rangebound and choppy. It is forming what may become an inverted head and shoulders pattern which is intrinsically bullish. If so, the neckline may trace the red trendline shown, which is validated to the left of the chart.
A break below the support zone (pink box) would likely bring prices down to at least prior support of around 104.4.
If the inverted head and shoulders does form, and the market follows the a bullish trend, breaking above the red line will be the first signal, followed by breaking out of the pink box. The top of the box also coincides with the 0.618 retracement level of the prior move to the downside.
A break below the support zone (pink box) would likely bring prices down to at least prior support of around 104.4.
If the inverted head and shoulders does form, and the market follows the a bullish trend, breaking above the red line will be the first signal, followed by breaking out of the pink box. The top of the box also coincides with the 0.618 retracement level of the prior move to the downside.