The USDJPY pair on its hourly chart shows a pennant pattern. Find out with us what to expect from this technical pattern.
The pennant overview
The pennant pattern is a technical continuation pattern. In Elliott wave terms, it could be regarded as a triangle structure. The failure rate from this formation is approximately 2%. On the other side, after the pennant breakout, the price tends to meet the target between 50% to 60% of times, which turn it as an exciting pattern to follow.
Our scenario for this chartist formation is activated if the price breaks and closes above 105.930. We are considering two potential targets, the first one is at 107.57, and the technical pattern target at 107.917. The invalidation level occurs if the price closes below 105.114. Finally, the risk/reward ratio of this scenario is 2.43.