FX.co ★ FX-Perfact | USD/JPY

USD/JPY H4 Timeframe: The USD/JPY H4 chart above shows a clear Double Top pattern forming around 153.28, signaling a potential reversal from an uptrend to a correction or even a medium-term downtrend. This pattern is a classic candlestick formation that reflects weakening bullish strength after the price failed to break through the same resistance level twice. The first peak formed around early October when the price reached 153.28, followed by a significant decline towards 151.00. Afterward, the price rose again and formed a second peak at nearly the same level, but this time the bullish momentum appeared to weaken, indicated by a candle with a long upper tail and relatively decreased volume. This condition reinforces the indication that market participants are starting to lose confidence in the sustainability of the price increase. In addition to the double top pattern, analytical support from the Exponential Moving Average (EMA) indicator also indicates a potential reversal. The 100 EMA (blue) is currently below the price but appears to be flattening, while the 200 EMA (red) is slowly rising towards the price. If the price breaks below the 151.47 area (100-day moving average), the initial confirmation of the double top pattern will be strengthened, and a correction towards 149.06 or even 147.83 will be more likely.

Conversely, if the price manages to stay above 152.30 and breaks through 153.28, the double top pattern can be considered invalidated, and the uptrend will likely continue with the next upside target towards 154.00 or higher. However, given the increasing selling pressure at the key resistance area, the current corrective scenario appears to be more dominant. Overall, the Double Top pattern on the USD/JPY H4 is a technical signal that traders should be wary of. The primary focus now lies on the 151.47 area as a confirmation level, where a break below it could open the door to deeper weakness. In the context of technical literacy, this formation reflects market psychology, where a second attempt to push prices higher fails due to stronger selling pressure, shifting optimism to caution regarding a potential reversal.