Trade of the Day: EUR/JPY

By: Dima Chernovolov

EUR/JPY recently broke the 4-hour Descending Triangle chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Descending Triangle at the 7-bar level – which is the result of the medium Initial Trend (5 bars), higher Uniformity (6 bars) and strong Clarity (9 bars). EUR/JPY is expected to fall toward the forecast price 128.85.

As can be seen from the daily EUR/JPY chart below – the pair earlier broke the key support area located between the key support level 129.70 (which has been reversing the pair from April) and the 50% Fibonacci correction of the sharp upward impulse from January. This price area is acting as the reinstate zone after it was broken. The proximity of this resistance zone adds to the probability EUR/JPY will continue to fall toward the forecast price 128.85.