The pair has dropped like a rock since the purple channel broke down on June 5. It reached the .886 Fib as expected [CIW: Jun 6], then immediately bounced back above the neckline of the H&S Pattern it had completed (in red, below.)
The following day, it fell back through that neckline, and has spent the past three sessions trying to climb back above it.
In the process, however, it formed a second H&S Pattern (roughly the dashed yellow line as the neckline.) Either of them could send the pair tumbling to the white 1.618 at 85.66.
But, the defunct purple channel has given rise to a decent-looking new channel (in white, below) that — if it holds — could pick up where the purple channel left off and carry USDJPY to new highs?
But, what if it doesn’t, i.e. if the H&S Patterns play out?
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