- EUR/JPY bears are lurking seeking an entry on the 4-hour time frame.
- Bulls will be back in control on a break of weekly resistance.
EUR/JPY is stalling on the longer-term northerly trajectory and is hamstrung below bearish structure on the weekly and 4-hour charts.
The following is a top-down analysis that offers a bearish bias from a swing trading perspective that requires the 4-hour chart's bullish trend to develop a little further into resistance so that a higher probability set-up could emerge.
The price is stalling within the monthly impulse that was bourne from a correction to prior highs.
The price would be expected to move higher, eventually, but there is a bearish structure on the lower time frames.
The weekly chart shows the price has respected the rules of the W-formations in two instances, W-1 and W-2.
On both occasions, the price pulled back to the necklines of both patterns. Expectations would be for an upside continuation from this juncture.
However, there is a bearish bias with the price trapped below resistance and considering the bearish engulfing candlestick.
On the daily chart, the price is trapped between support and resistance, but there is a bearish bias while below the 21-moving average and resistance.
From a 4-hour perspective, the price could yet extend higher to the 21-DMA/resistance before gravity kicks in and subsequently hamstrings the market back to test the neckline of what would be a W-formation.
Bears could capitalise on the prospects from the resistance zone and target the neckline's confluence with the Fibonacci retracement levels for a high probability setup.
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.