EUR/JPY Price Analysis: Bears seeking a downside correction


  • EUR/JPY bears are stepping in on the daily chart to target prior resistance. 
  • The W formation offers a compelling case for the downside so long as 4-hour resistance holds. 

EUR/JPY is ripening for a move to the downside and the following top-down analysis illustrates where traders might be taking their cues from the current market structure and price action:

Daily chart

As seen, the W-formation is yet to complete a downside correction of the daily bullish impulses. 

A test of the prior resistance would have a confluence with the 61.8% Fibonacci retracement of the upside advance and range.

The bearish candle's close has left a wick that would be expected to be filled in on the lower time frames in bearish price action.

4-hour chart

From a 4-hour perspective, there is an M-formation where the correction has already met the neckline of the formation. 

This adds additional conviction to the bearish prospects so long as the resistance holds and we see subsequent negative price action and bearish structure formed below the structure. 

30-min chart

From a lower time frame, an optimal entry point could be established from below current support and a 21 EMA as per the 30 min chart:

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Stop losing your money! 
Learn to trade with us!

24/7 signals + Webinars    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD recaptures 1.1900 on poor US employment-related data

An unexpected advance in weekly unemployment claims hurt the dollar, alongside the poor performance of US Treasury yields following words from Fed’s chief Jerome Powell.

EUR/USD News

GBP/USD pressured around 1.3750 amid vaccine concerns

GBP/USD trades around 1.3750, little changed, as the pound is incapable of taking advantage of the broad dollar’s weakness. Concerns about a delay to Britain´s vaccination campaign are weighing on sterling.

GBP/USD News

Gold bears stepping in at a critical resistance zone

Gold meets resistance and there are prospects of a significant correction. Gold prices were elevated again on Thursday as the US dollar dipped to a fresh low on the back of sliding US yields. US Treasury yields were losing ground again due to the fresh dovish comments from Federal Reserve Chair Jerome Powell.

Gold News

Ethereum: Buyers aim for $3,000 as more than $52 billion worth of ETH locked away

Ethereum price has been under consolidation for the past week after a run to its new all-time high of $2,151. The digital asset faces weak resistance ahead according to various on-chain metrics while bulls target $3,000.

Read more

Mining stocks: A house built on shaky ground

It’s tempting to say that miners are showing strength compared to gold based on the GDX’s performance, but other mining proxies say otherwise.

Read more

Forex MAJORS

Cryptocurrencies

Signatures