With the situation in Greece, US non-farm payrolls and China's export data all in the mix over the Sydney long weekend, my chart tonight is a bit of a work in progress

USDJPY - 4 hour chart

Charles Dow coined the term distribution patterns for broad sideways movements that sit at the top of up trends. They represent a loss of momentum and often indicate turning points.

One of the strategic principles I favour with technical trading is to look for opportunities to sell on breaks below distribution pattern support or, even better, to sell on a rejection of the pattern's resistance. These are 2 places where its often possible to sell with relatively close stops compared to the profit potential

The 4 hour chart USDJPY chart looks as though it could be forming into a distribution pattern. But it's early days and it's a bit a hard a label on this pattern at this stage. I have a hunch it could develop into a wedge type pattern. However, if it was to fall away from current levels it could also be a complex head and shoulder type pattern.

USDJPY CFD 4 hour Click to enlarge USDJPY CFD 4 hour
Click to enlarge

Either way a break of the support could set up for a downward correction. If the pattern does establish a resistance line by making a second peak not too far above the one I've labelled "H" that might also be useful. If that happens there could be an opportunity to sell on a third rejection of the wedge resistance line looking for a return to and possibly a break of the pattern support.