ranadagger
Short

USD/JPY seems to be forming a nice short

FX:USDJPY   U.S. Dollar / Japanese Yen
We are seeing a nice symmetrical triangle form after the initial drop from resistance levels. The top is almost a double top formation. The daily moving averages have turned down nicely.
As the prices moved down and have formed the triangle, likely breakout is expected to be on the downside. Triangle is a continuation pattern.
If the prices breakdown below the triangle at 119, we have a pattern target of 114-112. The SL for the trade after the breakdown will be 121. That is a 2 point stop for an expected profit of 3-5 points. We will quickly reduce the SL to the top of the breakdown bar to reduce the risk further.
A risk-reward ratio of 1:2 is attractive, as chances of overshooting on the downside are high.
Wait for confirmed breakdown before placing the short.


The breakout should be anytime soon. But do bear in mind that fundamental risks are still present in this pair (additional easing from BOJ, fed rate hike, if any, etc) that may affect the probability of the downside break. Nonetheless it does look attractive for a ride down to 118 or so.
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