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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.

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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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