The USD/JPY pair is trading inside a triangle pattern that is very similar to one, which equity markets have been showing diring the last couple of weeks. With the FOMC meeting tonight, I expect volatility to rise and we should probably see a breakout above or below the triangle.
Black lines – triangle pattern
USD/JPY is trading around the Ichimoku cloud and inside the triangle pattern as is showed above in the 4-hour chart. Today’s rejection in the area of 121 will increase chances of a move below the cloud towards 119.50. Breaking below the level of 119 will increase chances of a push towards 118-117.
Red line – support
USD/JPY is moving upwards making higher highs and higher lows. The trend is bullish in the short-term as long as the price is above the red trend line support. Breaking below 120.40 will give us a short-term sell signal. Rising volatility is expected tonight, so traders should be very cautious and expect big price swings that can easily be faded.
The material has been provided by InstaForex Company – www.instaforex.com