On Monday, the EUR/JPY currency pair is trading bearish below 120.350 level, which previously was working as a support. The EUR/JPY fell dramatically to violate the symmetric triangle pattern as the demand for safe-haven Japanese yen soared over ongoing uncertainty from the U.S. China trade war.
Besides, Prime Minister of Japan, Shinzo Abe, approved an economic stimulus package worth 26 Trillion Yen ($239 Billion) to help a slowing domestic economy on Thursday.
Abe said that the policy package was designed to help in overcoming the economic downside risks caused by weakening global growth and recent tax hikes. Japan reported the lowest quarterly economic growth in a year for the July-September period, with a 0.2% rise on an annual basis.
In compiling the package, Japan's heavily indebted that the government will need to beat stretched capacity to battle overseas opportunities and the impact of October's sales tax hike, which Bank of Japan has estimated to generate a budget of 2.2 Trillion Yen on the households in 2020 fiscal.
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| Support | Pivot Point | Resistance |
| 119.83 | 120.3 | 120.6 |
| 119.53 | 121.08 | |
| 118.75 | 121.86 |
The EUR/JPY has finally come out of asymmetric triangle pattern and has closed series if candles outside the range. The resistance level of 120.350 is likely to keep the EUR/JPY bearish until the next support level of 119.700.
Both of the leading and lagging indicators such as RSI and 50 periods EMA are suggesting chances of a bearish bias in the EUR/JPY currency pair.
EUR/JPY – Trade Setup
Sell Limit 120.25
Take Profit 119.750
Stop Loss 120.55
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