The charts show a potential reversal of fortune in the EURUSD and USDJPY.
The USDJPY hourly chart plots a double top that has broken its horizontal support. While this is traditionally a reversal chart pattern, confirmation has to come from another chart – the 240min. In this case, an upward trending support is clearly visible and this has not been violated.
A double top in the hourly chart shows resistance over 2 days whereas a trendline in the 4-hourly chart is a multi-week support.
Double top in the hourly chart
As for the Euro, a potential head and shoulder patten is now clearly visible awaiting confirmation by breaking the neckline. A break and throwback play is now the prudent strategy.
Inverted head and shoulder awaiting confirmation
If both reversals materialise, we are looking at a retracement move in the Dollar.
