Daily Forex Update: EUR/JPY

By: Dima Chernovolov

EUR/JPY continues to fall inside the clear Down Channel chart pattern which was previously identified by Autochartist on the 4-hour charts. Autochartist rates the quality of this Down Channel at the 5 bar level – which reflects the slow Initial Trend (one bar), below-average Uniformity (4 bars) and near-maximum Clarity (9 bars). EUR/JPY is expected to continue to fall inside this Down Channel –  in line with the earlier downward reversal from the resistance area highlighted below.

As can be seen from the daily EUR/JPY chart below, the price earlier reversed down from resistance area lying at the intersection of the key resistance level 131.00 (which also reversed the price in January of 2016), upper daily Bollinger Band, resistance trendline of the daily up channel from 2016 and the 50% Fibonacci correction of the downward impulse from 2014. The proximity of this resistance zone and the overbought weekly Stochastic increase the probability EUR/JPY will continue to fall inside this Down Channel.

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