USDJPY with a very clean bullish setup
29 March 2023
A nice and clean technical setup can currently be spotted on USD/JPY, which has been one of the strongest currency pairs on the market since the start of trading on Wednesday. USD/JPY is currently reversing the negative sentiment and doing so with very handsome technical moves.
The yellow formation at the bottom of the chart is the inverse head and shoulders pattern. This type of pattern usually marks the end of a bearish sentiment and starts an upswing. The bearish sentiment has been present since the beginning of March, highlighted by the blue downtrend line. This downtrend line was broken during the Asian session today, which was the first step towards victory.
The second step was the breakout of the neckline (green) of the iH&S formation, which occurred shortly after. The breakout of these two resistances seals the deal and gives a rock-solid buy signal. The second half of the European session brings us a very interesting development: a test of the broken neckline as a support. The test had an excellent outcome for the buyers as the price bounced and aimed higher, establishing new weekly highs.
All of these developments on the chart present a very clean bullish view, which leads me to think that the next few days will be positive for USD/JPY