- EUR/JPY bears are lining up to take on the daily support structure.
- The bears are rejecting the daily correction at a significant layer of resistance and confluence between structure and Fibos.
EUR/JPY's downside case is compelling as traders step away from the euro which is plagued by the coronavirus fears.
The yen is a safe haven play and the technicals in the cross are bearish from both a long-term and near term perspective.
The following is a top-down analysis that illustrates where the path of least resistance is for a downside continuation of the broader bear trend.
The path of least resistance is to the downside judging by the price action on the daily chart.
The price has corrected a significant portion of the latest daily impulse and the old support would be expected to continue to act as resistance.
The price is yet to break the 21-day EMA though.
That being said, the daily wick on the last daily bearish candlestick is compelling for a restest of the downside from lower time frames to fill in the wick.
Meanwhile, from an hourly perspective, on a break of initial support, the bears will face the next layer of the support structure, which, however, is expected to give way to longer-term forces and reveal the daily chart's recent lows which will be the real test.
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