Risk Appetite Disappears as USD/JPY Follows Channel Lower

The USD/JPY has formed a Continuation Channel Down chart pattern in the 60 minute time frame as the Yen is gaining on the US Dollar. This is quite a feat as the US Dollar is strengthening with the pre-market Dow Jones being down over 180 points. The Yen is strengthening as risk appetite seems to be disappearing with the start of a new week.





With the initial trend reading being very strong and the pattern quality high, there is more chance of downward follow-through. However, never overlook the trend reversal entry as the prices near intraday term are able to rally. The 60 minute is a relatively short term time frame. Short entries with this trend can be taken as a breakdown through the support of the lower blue downtrend line or off the resistance of the upper green downtrend line. The entry off resistance would require a significant correction. On the other hand, it is also the lower risk entry of the two shorting possibilities.

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