In previous posts we warned traders that USDJPY was showing reversal signs. The first sign came two weeks ago when the weekly candle formed a bearish hammer pattern. The following week started very strong against our predictions, however at the end of the week prices plummeted and repeated an even worse bearish hammer pattern by breaking to lower lows.
This week continues where the previous ended. Price is bounced but it remains under pressure while it is making new lower lows below that weekly lows of previous two weeks. Current price action implies that USDJPY is expected to be under pressure for the coming weeks and a pull back towards 111-111.50 is very possible. The weekly reversal has been confirmed and at current levels we are either neutral or slightly bearish. Price is vulnerable to more downside.
