USD/JPY Forms Tweezer Candlestick Pattern

The USD/JPY finished the day down at 85.84, after opening the day at 86.04. The GBP/JPY was unchanged at 136.45, as was the EUR/JPY at 113.15.

Following the release of the weekly U.S. unemployment claims, the USD/JPY slumped below the 86 level to a low of 85.70 before recovering somewhat. The long term downward trend of the pair appears to be increasing as the 20-day simple moving average is sloping sharply lower. However, traders should be aware of the tweezers candlestick pattern that has formed from the lows of Tuesday and Wednesday at the price of 85.31. This is considered a potential reversal pattern and should serve as short term support for the pair. In light of this reversal pattern, stops should be tightened on any short positions

Traders should be eyeing the release of the U.S. non farm payrolls report today. If the result fails to meet the market's expectation of a decline of 63K jobs, the USD/JPY should continue its bearish trend.