In today’s technical analysis, let’s focus on USD/JPY, where the technical picture has clearly turned negative.
Recent developments in the Middle East have weakened the US dollar, and that shift is now visible on the chart.
The pair has formed a classic head and shoulders pattern, marked with yellow rectangles. More importantly, the price has already broken below the neckline, marked with a black line. This breakout activates the pattern and gives a signal to sell.
What confirms this bearish scenario is the structure that follows. The price is now forming lower highs and lower lows, which is a clear definition of a downtrend.
So this is no longer just a pattern. It’s an active move.
With the neckline broken and the trend structure aligned, sentiment remains negative. As long as the price stays below the neckline, the base scenario is continuation to the downside.