Another Pattern on USD/JPY — Ascending Channel

In addition to the still active trade on USD/JPY bullish flag pattern, the currency pair now shows an ascending channel formation on the same daily timeframe. This channel is a preparatory pattern for a bearish breakout trade and will most likely trigger if the aforementioned bullish flag trade fails. This USD/JPY setup complements a similar ascending channel on GBP/JPY.
Look at the chart below to see the pattern marked with the yellow borders. The cyan line will serve for a breakout entry (there is a 10% buffer zone based on the channel’s height). The green line will turn into an inclined take-profit level (at 100% of the channel’s height distance). I will set my stop-loss to the high of the breakout bar or the previous bar’s high if the bigger part of the breakout bar is outside the channel. I will ignoure bullish breakouts of this channel. Click on the image to see a bigger chart:

I detected this channel using the Channel Pattern Detector indicator and built this chart using the Channel Pattern Detector indicator. You can download my MetaTrader 4 chart template for this USD/JPY pattern. You can trade it using my free Chart Pattern Helper EA.
Update 2015-11-24: Yesterday at 19:38 GMT, the channel was broken by a bearish candlestick. My pending stop sell triggered at 122.776 with stop-loss at 123.575 (Thursday’s high) and the current take-profit at 120.843. The breakout looks significant. You can also see my USD/JPY bullish flag on the chart; that trade seems to be doomed now:

Update 2015-12-02 20:00 GMT: Another USD/JPY trade bit the dust as the currency pair hit my stop-loss at 123.575 three hours ago. The breakout day looked nice but everything that happened to the chart after that had nothing to do with a good short trade:


If you have any questions or comments regarding this ascending channel on USD/JPY chart, please feel free to submit them via the form below.