USD/JPY has been consolidating inside a symmetrical triangle for almost an entire month, as traders are torn in picking a clear direction for this pair. However, the bleak US GDP release has resulted in a sharp downside break from triangle support and indicated that the next trend could be downward.
Stochastic is headed lower, indicating that selling pressure is still present. Price has already made its retest of the broken support level and resumed its drop, indicating that sellers are in control. A break below the previous lows around 101.65 could be a sign of further selling momentum.
Shorting at 101.50 with a 50-pip stop back inside the triangle could offer a strong return on risk if one aims for roughly 150 pips, which is approximately the same height as the chart pattern.
By Kate Curtis from Trader’s Way