Now, the uptrend has reached a pivotal moment: will the uptrend be able to continue above the top? Or will a larger bearish pullback take control?
Price Charts and Technical Analysis
The EUR/JPY has a better chance of continuing with the uptrend for the moment. Mainly because of:
- Te bullish break above the resistance trend lines (dotted orange)
- The strong push above and away from the 21 ema zone
- The wave patterns suggest a completed ABC (grey) correction within wave 4 (orange)
The key decision zone is the 21 ema high and low. A bullish bounce would indicate that an uptrend continuation (green arrows) is probable
A bearish breakout, however, indicates a deeper retracement (red arrows). In that case, the immediate wave 123 (grey) pattern failed but the larger uptrend remains intact (blue arrows) via an expanded wave 4 (orange 4’).
On the 4 hour chart, price action bounced at the resistance of the Wizz 8 level and previous top. This could indicate an ABC (black) pattern within wave 4 (pink).
A bearish breakout could drop towards the Fibonacci targets around 124.50-125-125.50, where a bullish bounce is expected (green arrow).
An immediate bullish breakout (blue arrows) could take place if price action turns around and breaks above the local resistance zone.
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The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter