- EUR/JPY’s hourly chart shows a sideways channel pattern.
- A range breakdown would imply a continuation of the sell-off from recent highs near 126.00.
EUR/JPY is trading near 123.05 at press time, representing marginal gains on the day, having faced rejection at 123.15 a few minutes ago.
The pair has carved out a sideways channel on the hourly chart with the upper end and lower end at 123.20 and 122.57, respectively.
A breakout would open the doors for 123.83 (target as per the measured move method). However, the bias would remain bearish as long as the pair holds below 124.41 – the former support-turned-resistance of the head-and-shoulders (H&S) breakdown confirmed on Sept. 16.
Alternatively, a range breakdown, if confirmed, would reinforce the bearish view put forward by the H&S breakdown and expose support at 122.00 (100-week simple moving average).
Trend: Bearish below 122.57