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Forex Strategy: USD/JPY Plunges Following Shooting Star Candlestick

Talking Points

  • USD/JPY Technical Strategy: shorts preferred

  • Shooting Star pattern near 104.00 offered ominous warning

  • 102.00 in focus as the next potential support level

The Shooting Star pattern noted in recent candlestick’s reports has resulted in extended declines for USD/JPY with the pair plunging below the 103.00 handle in recent trading. There are few signs of the push lower slowing, given a bullish reversal signal remains missing on both the daily and four hour charts. This puts the psychologically-significant 102.00 mark in focus as the next potential level of support for the pair.

USD/JPY: Shooting Star Offered Ominous Warning

Forex-Strategy-USDJPY-Plunges-Following-Shooting-Star-Candlestick_body_Picture_2.png, Forex Strategy: USD/JPY Plunges Following Shooting Star Candlestick
Forex-Strategy-USDJPY-Plunges-Following-Shooting-Star-Candlestick_body_Picture_2.png, Forex Strategy: USD/JPY Plunges Following Shooting Star Candlestick

Daily Chart - Created Using FXCM Marketscope 2.0

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Drilling down to the four hour chart; the unusually long series of Doji candlesticks near the critical 104.00 level suggested deliberation amongst the bulls. With the bears taking control of prices and sending USD/JPY spiraling below prior support zones, there is some doubt over the potential for a bounce in intraday trade.

USD/JPY: Eyeing 102.00 As Next Support

Forex-Strategy-USDJPY-Plunges-Following-Shooting-Star-Candlestick_body_Picture_1.png, Forex Strategy: USD/JPY Plunges Following Shooting Star Candlestick
Forex-Strategy-USDJPY-Plunges-Following-Shooting-Star-Candlestick_body_Picture_1.png, Forex Strategy: USD/JPY Plunges Following Shooting Star Candlestick

Four Hour Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

Follow David on Twitter: @Davidde

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original source

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