EUR/JPY Decision Zone at 50% Fib at 123.40

The EUR/JPY has reached a decisive support zone. The break or bounce moment will offer traders an interesting spot for trade setups.

This article reviews the potential breakouts, wave patterns, and chart patterns.

Price Charts and Technical Analysis

EUR/JPY daily chart

The EUR/JPY is testing the resistance trend lines and 21 ema zone:

  • A bullish breakout confirms the uptrend in wave 1 or 3 (purple).
  • A deeper bearish pullback could indicate a wave 1-2 (purple).

A bullish break is expected to develop as follows:

  • It could see a break, pullback and continuation pattern.
  • A bullish daily candlestick should confirm the bullish break.
  • This is valid as long as the bullish candle appears in about the next 5 trading days (the HMA 20 should remain above the 21 ema high).

A bearish pullback could see two variations:

  • A test and bounce at the 144 ema for a wave 1-2 (purple).
  • A bearish breakout (red dotted arrow) which invalidates (red circle) this wave pattern but not the entire uptrend because the 50% and 61.8% Fib remain support

On the 4 hour chart, price action has reached the last support zone if the current pullback is a wave 4 (blue). A deeper bearish breakout (yellow circle) indicates a wave 1-2 pattern instead. A full break below the bottom (red circle) invalidates the bullish outlook.

However, if price action manages to:

  • Break above the 21 ema zone.
  • And break above the resistance trend line.
  • Then the EUR/JPY would confirm the development wave 5 to the upside.

EUR/JPY 4 hour chart

Good trading,

Chris Svorcik

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

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