Trade of the Day: EUR/JPY
By: Dima Chernovolov
EUR/JPY continues to fall inside the 4-hour Down Channel chart pattern, which was recently identified by Autochartist. Autochartist measures the quality of this Down Channel at the 6-bar level – which is the result of the slow Initial Trend (2 bars) and strong Uniformity and Clarity (8 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 chart below, the price earlier broke the support zone located between the key support level 124.35 and the 38.2% Fibonacci correction of the previous upward impulse from June. This price area is acting as the resistance zone after it was broken. The proximity of this resistance zone increases the probability EUR/JPY will continue to fall inside this Down Channel.