Last week, we wrote about the possibility of support at the broken bearish trend line on the USD/JPY Daily Chart. At this point, there has been some minor support at the broken trend line. This rally has led to the formation of a bullish pattern. Furthermore, this pattern would reach our entry at the broken trend line. Therefore, this pattern provides us with a specific trade idea that allows us to test the thesis that the broken trend line could provide strong support. The bullish pattern is forming on the USD/JPY 4hr Chart that would allow
us to go long at 78.14. Three separate levels of support are
converging near our entry: 78.6% of 01, 161.8% of AB, and 1A=BC.
The trade idea would be invalid if the pair rallies to 79.34 before reaching our entry.