- EUR/JPY found tough resistance at the 23.6% Fibo of the 2019 range and cloud top.
- A break there opens trend line resistance guarding a break towards the 200-DMA (blue on the chart below) at 127.80.
- On a break of 124.90 opens risk of a subsequent test of trend line support guarding the 38.2% Fibo.
- Below 123.40 (Jan 7 and Jan 15 lows) opens of the 50% Fibo at 123.02.
- A break there will likely see the price continue in its southerly trajectory, extending last September’s bear trend.
- However, in the near term, daily candles are aligned bullish in a rising channel and hourly stochastics are oversold.
- The price at the bottom of an hourly rising wedge formation as price holds above the 200-hr SMA on a third downside attempt.
- Typically, the price would revert back to the top of the rising wedge and in this case, above recent tops through 125.70.
- A followthrough opens the case for a test of the descending resistance line to challenge the 126 handle – A bear’s dream entry point with sights on a reversal back to the 38.2% Fibo target at the 124 the figure.
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