EUR/JPY Technical Outlook: Downtrend Set to Resume

EUR/JPY Technical Outlook

• Intermediate-term trend lower to resume
• Corrective sequence on 4-hr triggering

EUR/JPY Technical Outlook: Downtrend Set to Resume

The bounce in EUR/JPY looks to be coming to an end, with a wedge on the 4-hr chart starting to give-way. These types of ascending wedges within the context of a downtrend indicate a lack of conviction and act as corrective patterns.

Shorts initiated here may look to set their stop sufficiently above last week’s high at 13056, while initially targeting the most recent swing-low at 12859 and the 200-day which is in confluence at 12862. From a current price of just over 13000 that could amount to a solidly skewed risk/reward ratio.

Should price decline to support, traders may want to take profits or at least take partial profits and implement a trailing stop strategy if momentum looks set to push towards a new swing-low beneath support.

EUR/JPY Daily Chart

EUR/JPY 4-hr Chart

EUR/JPY Charts by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX