Today, I have for you three pairs with Japanese yen. This pair is considered as a safe haven asset, so in theory, should gain, when the sentiment on the market is bearish. That is the case right now as tensions around the trade wars between China and the US are increasing. All three setups are pretty similar to each other and the correlation between them is high.
The first setup is the CHF/JPY, which on Monday, broke the crucial long-term support using the bearish gap. The breakout, from the technical point of view, was promoted by the descending triangle pattern. After the breakout, the price rushed to close the gap and created the pennant formation. Pennant was promoting a further slide and this is precisely what happened. The sentiment right now is definitely negative.
AUD/JPY is the second setup and here we also had a gap, which allowed a break in major support. In this case, the support is dynamic and connects higher lows since January. Traders managed to close the gap and after that, immediately started to sell. As long as we stay below the black line, bears have a greater chance of success.
The last setup is the GBP/JPY, which is loved for its volatility. Most recently, the price managed to break crucial horizontal support on the 143.8, which gave us a proper sell signal. The whole slide was initiated at the beginning of May with a very nice false breakout pattern.
By Alpari Research & Analysis (Tomasz Wiśniewski)
May 08, 2019 05:41AM ET
Source: Investing.com