Daily Forex Update: EUR/JPY
By: Dima Chernovolov
EUR/JPY continues to fall inside the hourly Down Channel chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this Down Channel at the 6-bar level – which reflects the significant Initial Trend (7 bars), low Uniformity (1 bar) and above-average Clarity (7 bars). EUR/JPY is expected to fall further inside this Down Channel – in line with the earlier breakout of the key support area shown below.
As can be seen from the daily EUR/JPY below, the price earlier broke sharply through the key support level 126.70 (which reversed the price with the daily Japanese candlesticks reversal pattern Hammer in October). This price level is acting as the strong resistance level after it was broken. The proximity of this resistance level increases the probability daily EUR/JPY will continue to fall inside this Down Channel.
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