USDJPY has rallied into a quarterly resistance trend line, forming a Head and Shoulder (H&S) pattern on the weekly chart. I have sold short USDJPY in anticipation of it having formed a current high and moving lower in the near future. I also expect to pyramid this instrument to the short side should my market timing prove to be correct.
There are two price targets of importance in this case. The first one is located nearly 1,300 pips away at 107, based on the H&S price pattern projection. The H&S pattern on the weekly chart may in fact turn out to be a peak in a broader move on the quarterly chart, hence there is real potential for the USDJPY to test the 96.50 price level, which represents my projected target for this currency pair.
The risk:reward ratio with either price target is low, making this trade a very interesting investment opportunity.