Forex Trading: USD/JPY In Triangle Consolidation Within Downtrend
Price action on USD/JPY, a daily chart of which is shown, has been in a trading range consolidation for around two weeks now. This consolidation has taken the form of a symmetrical triangle or pennant type of formation, which is essentially a converging consolidation, and occurs within the context of an overall long-term downtrend. A strong break of the chart pattern in either direction should have important consequences.
A break to the upside would bring price up to approach the upper border of the overall parallel downtrend channel, potentially threatening the longstanding downtrend. A further breakout above the channel’s top border could signify a change in trend, with an immediate upside resistance target in the 92.00 price region.
A break to the downside of the current chart pattern would continue the overall downtrend, potentially targeting further key support in the 88.00 price region.
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