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USD/JPY continues to depreciate and has formed a Channel Down Pattern on the 4H chart. The pattern has 59% quality and 90% magnitude in the 127-bar period.
The pattern started when the pair rebounded from 80.626 and after testing pattern's support band at 79,141 and 77.950 it slowed down at 78.176 where the pair is currently trading. The SWFX market sentiment shows that 75% of traders expect recovery of the pair in the recent future. The Stochastic indicator on 1D and 1W outlooks suggest that the pair might start moving towards pattern's resistance. Long traders could set the first target at the 27th of July high at 78.3910. If this level is breached next targets could be at 78.466, 24th of July peak and also daily retracement level (Fibonacci), and 20th of July high at 78.807.
Technical indicators on aggregate point at depreciation of the pair on 1D and 1W outlook indicating that the pair will continue to follow pattern's trend or will break through the patterns resistance. Short traders should focus on the 26th of July low at 78.019. If this level is breached, next targets could be set at the recent pattern's support level test at 77.950 (also daily retracement level (Fibonacci)) and summer low of 77.660 which should be a very strong psychological level.
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