USD: JPY – Short term Head and Shoulder

Market reaction was minimal when the Bank of Japan left monetary policy unchanged today.

Even so, the yen has had a steep descent following news of an election in Japan leading to expectations of more “dovish” members being appointed to the BOJ. We’ve arrived at a situation where, the 4 hour USD: JPY chart is starting to shape up as a possible head and shoulder or similar reversal opportunity for swing traders.

USD:JPY CFD – 4 Hour. Source CMC Tracker

It’s early days yet, the current rally could push a bit higher and still complete a right shoulder or price could waffle around for a while and turn this pattern into something more like a wedge or a triangle.

As things currently stand though, a clear break below the neck line would complete a head and shoulders pattern. This is the sort of set up that often interests swing traders looking for quick moves and operating with close stops.

Of course a strong move past the “head” would negate the possibility of a reversal pattern at this stage.

If we get a set-up, I’ll post some follow up thoughts on trading strategy.

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
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2 Responses to USD: JPY – Short term Head and Shoulder

  1. dv34 says:

    On the daily it is also a clear 5th wave of the major impulse wave 3 from 77.43, and on the 4hr there is a butterfly bottom which has hit the 161% extension right around the head and shoulders… totally agree with you…

  2. David says:

    Weekly and daily Stochastics overbought

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