USD JPY attempts triangle breakout

USD/JPY (daily chart) has attempted to break out above a large triangle consolidation pattern that has been in place for more than five months since the multi-year high of 103.72 was hit in May. The pair broke out tentatively yesterday, hitting a high of 99.40, before pulling back. The upper border of this triangle extends from the May 103.72 high and connects the September high at 100.60 to the highs of the past week. During the course of this narrowing consolidation, volatility progressively decreased and the 50-day/200-day moving averages converged and crossed slightly. This provided an indication that volatility was near its low extreme and there was the potential for a breakout of the triangle consolidation.

Yesterday’s tentative upside breakout could develop into a larger breach, especially if the pair goes on to break out above the key 100.00 resistance level. If that is to be the case, the clear upside objectives are the 103.00 resistance level and then a re-test of the noted 103.72 multi-year high. Strong downside support continues to reside around the 97.00 level, which was last tested and respected just two weeks ago.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.