By: Dima Chernovolov
EUR/JPY recently broke the daily Triangle chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Triangle at the 8-bar level – which is the result of the sharp Initial Trend (10 bars), substantial Uniformity (9 bars) and maximum Clarity (10 bars). EUR/JPY is expected to fall toward the forecast price 119.79 – in line with the earlier breakout of the support area shown below.
As can be seen from the daily EUR/JPY chart below, the breakout of this Triangle coincided with the breakout of the strong support area located between the key support level 122.40 (which also reversed the price in September) and the 38.2% Fibonacci correction of the sharp upward price impulse from May. This price area is acting as the strong resistance zone after it was broken. The proximity of this resistance area increase the probability EUR/JPY will continue to fall toward the forecast price 119.79.