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USD/JPY to Follow CAD/JPY in a Triangle Pattern?

It was not easy to decide whether it should be called a descending triangle or a symmetrical one. In reality, it is something in between, but the descending triangle looks to be a more appropriate designation for this USD/JPY pattern because the lower border’s slope is significantly less pronounced than the upper one’s. The formation serves as a long-term consolidation following a year-long downtrend in the currency pair. It is also correlated with the recent CAD/JPY symmetrical triangle, which broke down just two weeks ago.

The yellow borders mark the triangle pattern itself. The cyan line is my potential entry level constructed at 10% of the triangle’s base width below the lower border. The green line is my potential exit level (yeah, the yen at 87.xx indeed seem far-fetched at this point). I will set my stop-loss to the high of the breakout bar or to the high of the previous bar if the breakout one is trading mostly outside the triangle. Needless to say that I will be only taking a sell trade here — bullish breakouts will be ignored because descending triangle is a continuation pattern for downtrends. You can click on the image below to see the full-size chart:

USD/JPY - Descending Triangle Pattern on Daily Chart as of 2016-10-02

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this USD/JPY pattern. You can trade it using my free Chart Pattern Helper EA.

If you have any questions or comments regarding this descending triangle on USD/JPY chart, please feel free to submit them via the form below.

Posted on Forex blog. Click Here For Original Source Of The Article

About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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