The Japanese cross EUR/JPY trades bearish, testing the double bottom level of 119.200 area. Most of the weaknesses triggered due to weakness in the single currency Euro. The German ZEW Economic Sentiment figure recorded a slight drop of 0.3 points in October 2019 and presently lasts at negative 22.8 points.
With this, the market is trading EUR/JPY with a bearish bias over sentiments that European Central Bank may keep the interest rates dovish.
Technically, the EUR/JPY is testing the double bottom support level of 119.200. On the 2 hour chart, the pair has formed a descending triangle pattern, which is extending resistance at 119.400 along with support at 119.200.
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Typically, the descending triangle patterns are expected to violate on the lower side. Where the bearish breakout of 119.200 can extend bearish rally until 118.750.
The MACD and Stochastics are holding below 0, suggesting a bearish bias in the pair. Moreover, the EUR/JPY just had a bearish crossover on the 50 periods EMA. Closings of candles below this 50 periods EMA level 119.400.
Forex Trade Setup
Entry - Sell Stop 119.150
Take Profit - 118.750
Stop Loss - 119.400
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