the EUR/JPY is testing the previous top at 127. Price action did confirm the previous expected bullish bounce at the 50% Fib.
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:
- The 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.
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.