USDJPY has continued to slide since our Apr 8 call for a top [HERE.]   It back-tested the broken purple channel midline on May 6, and is signalling a sell-off to at least the bottom of the purple channel (96.25 – 96.66) where it intersects with the white channel .75 line in the next day or two.

  But, if the most obvious harmonic patterns play out, we could easily see the purple channel break down and the white midline come into play at the intersection of the .886/1.618 at 93.40/93.26 towards the end of May.

Remember, it was the white channel that confirmed the harmonic pattern reversals at 100 last month.

“…there is growing risk of a downturn as it approaches 100… it appears the pair might have hit at least interim resistance at today’s high.”

continued for members…

So, I’m inclined to take this potential slide seriously.  The fact that it agrees with my equities outlook is icing on the cake — as is the RSI chart below.  Note the intersection of the falling white channel midline and the purple .25 line occurs around the end of the month as well.

This is a fairly low-risk setup, as a move above 99.94 invalidates it.  That’s 1.07 of risk versus a potential gain of 2.2-5.6.

GLTA.