03.02.202320:53 Forex Analysis & Reviews: USDJPY reversal as price exits medium-term bearish channel.

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Red lines- bearish channel

Green lines- horizontal resistance levels

USDJPY is trading above 131. Short-term trend has reversed to bullish as price has now exited the bearish channel it was in since October. Price has also broken the horizontal resistance levels of 131-130.50. Yesterday's low at 128.34 is most probably an important low. Traders need to be patient and see how price reacts after today's jobs report and if price starts making higher highs and higher lows. Exiting the bearish channel is an important win for bulls, one that might be the beginning of a new up trend. Let us not forget the long-term inverted head and shoulders pattern that has been broken and we could consider this pull back as a back test of the neckline of the pattern.

Blue line- neckline support previous resistance

Red lines- Inverted head and shoulders pattern

USDJPY has returned back to the big break out area of 128-129. A bounce off this area which is now support, could be the start of the new upward wave that will unfold the potential of the inverted head and shoulders pattern. At the recent lows of 128.34 we also find the 50% Fibonacci retracement of the entire move from January 2021 to 151.96. There is a confluence of support at current levels. Bears need to be very cautious as we could be starting a new up trend.

Back to the list

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.