EUR/JPY Consolidates in a Bear Flag
Market Condition: EUR/JPY Pending Breakout
Target 1: 50% Extension 129.68
Target 2: 100% Extension 128.66
Invalidation: False Breakout Over 131.50
EURJPY 30Minute Chart
(Created using Marketscope 2.0 Charts)
The EUR/JPY has been declining with other Yen crosses this morning on news of fresh BOJ (Bank of Japan) intervention into the market. So far, the pair has declined as much as 270 pips today, going into this weeks close. Currently the pair is trading off the daily lows and is potentially forming a bearish flag pattern. This sets traders up to trade a fresh breakout next week under today’s low at 131.03. Primary targets for future bearish breakouts include 129.68 and 128.33, which represent a 50% and a 100% extension of this morning’s move respectfully.
In the event of a false breakout, the bearish flag would be considered invalidated if prices traded back inside of current support at 131.50. This would suggest that price is set to either continue consolidating, or perhaps reverse back towards higher highs. In addition, breakout traders should be prepared for the possibility that prices do not breakout to lower lows. In this scenario, any existing entry orders may be deleted.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.