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  • USD/JPY has created an inverse head-and-shoulders pattern.  
  • The daily chart also shows a bearish channel breakout.  

USD/JPY pair is currently  trading at 108.40, having hit a high of 108.59 earlier today. The pullback from session highs could be associated with the risk-off tone in the Asian equity markets.  

On the daily chart, the currency pair seems to have created an inverse head-and-shoulders pattern with the neckline resistance at 108.44.    A daily close above that level would confirm the breakout and create room for a rally to 110.10 (target as per the measured move method).  

An inverse head-and-shoulders breakout looks likely as the path of least resistance is to the higher side – the pair confirmed a bearish channel breakout on Friday with a 0.60% rise.  

Daily chart

Trend: Bullish above 108.44.

Pivot points