USD Is Getting Ready for a Bearish Reversal

Recently, trading the yen has been full of huge movements, but also a lot of uncertainty and anticipation. Anticipation for what? Well, a few Japanese officials commented on their currency’s exchange rate hinting on an intervention. Speculations are heating up and the atmosphere is getting denser. Is technical analysis giving us any hints about the possible direction?

USDJPY is currently drawing a double top formation. Local resistance is on the psychological barrier of 145 (orange). The price is currently supported by two factors. The first one is the purple up trendline but it seems that it won’t be too hard to break it. Another one is the 23.6% Fibonacci, which in my opinion will be a key support here, especially since this price has already proven to be effective in the first half of September.

In case the sellers manage to break the 23,6%, another target will be another Fibo – 38,2%! It was previously the highest point in July and I guess sellers have an appetite to test it, but this time from the bottom.

As you can see, my view is slightly bearish, but for full bear mode, I would have to see the breakout of the up trendline first. An alternative view is the price breaking the orange resistance and denying the double top formation. In my opinion, chances for that happening are now rather limited.