As I write this blog, short term USDJPY charts are showing signs of completing a trend peak at what could be a significant Fibonacci point
USDJPY correction - 4 hour chart
The 4 hour chart looks like completing a second trend peak inside a Fibonacci cluster zone. This cluster consists of:
- The 61.8% retracement of the move from 110.09 down to 105.20 AND
- A projection that the b/c rally will be the same size as the X/a rally
A peak at this cluster zone might also be a Gartley set up completing an "abc" correction. This creates the possibility that the downward move in $US is set to continue with the next leg taking us below 105.20
However, the fact that 2 trend peaks have now been made in this zone might require a bit of caution. The potentially bearish alternative would be a minor double top. However we might also be setting up a minor trading range (rectangle type formation) that could break to the upside. Bearing all that in mind, one way of handling the situation could be to treat it like a minor double top and only sell if there is a clear break of the support below the double top. A more conservative approach still could be to wait for an overlap under the peak at "a" to indicate ongoing weakness.