February 2020 is over, the monthly candle has closed, we can take a closer look at the situation on the monthly chart of the American dollar to Japanese yen pair.
After quite a long period of consolidation, in the third decade of February there was an awakening and on 19 February there were dynamic growths. That day the daily candle reached 180p. After the next day of increases, the price reached the resistance of the growth channel (Daily chart), in which it moved from August 2019, setting the maximum of this year. The next day, the pair began to lose and the month ended up falling to 107.50, which turned out to be the minimum this year.
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These upward and downward movements resulted in a large monthly downward candle, which engulfs the three preceding ones creating a bearish engulfing pattern. When we look at the USDJPY pair’s daily chart, we can see that the price after a false break out from the triangle (from the monthly chart) on the last day of February broke down from the channel from the daily chart.
In the near future, we can expect a re-test of the defeated support of the channel, which will now become a resistance for the growth correction and is located near level 109. After the re-test, the pair may return to declines, and the supply goal will be the demand zone (brown) at 107.10-106.50.
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