An almost perfect TA Pennant pattern on the Japanese Yen weekly chart

  

The Japanese Yen, in US Dollar terms, has just formed what must be the most perfect Technical Analysis Pennant pattern to be seen for some time. The illustration above shows this on the weekly chart. It is almost too good to be true.

Classical Technical Analysis describes this formation as occurring when a sharp run up is followed by a period of gradually more damped oscillation, which indicates consolidation – in other words the market is watching and waiting, and this becomes more pronounced as the triangle, or pennant, is made into a point.

For completion, as this is a continuation pattern, it classically calls for another sharp move in the same direction as the “flagpole” upon which the pennant is hung. The next sharp directional move should also have roughly the same magnitude as the one that occurred before the triangular part was formed.

Will it work out this time? The pronouncements of the US Federal Reserve, at the end of its meeting later in the day today, could have some bearing on that.