EUR / JPY is testing the previous high at 127. Price action confirmed the expected bullish rebound at 50% Fib.
Now the uptrend has reached a turning point: will the uptrend be able to continue above the peak? Or will a larger bearish pullback take control?
Price charts and technical analysis
EUR / JPY has a better chance of continuing its uptrend for now. Mainly because of:
- The bullish breakout above the resistance trend lines (orange dotted line)
- The strong push above and away from the 21 ema zone
- Wave patterns suggest full ABC correction (gray) in wave 4 (orange)
The key decision area is the 21 ema up and down. A bullish rebound would indicate that a continuation of the uptrend (green arrows) is likely
A bearish breakout, however, indicates a deeper retracement (red arrows). In this case, the immediate pattern of wave 123 (gray) has failed but the larger uptrend remains intact (blue arrows) via extended wave 4 (orange 4 ‘).
On the 4 hour chart, price action rebounded to resistance from the Wizz 8 level and previous high. This could indicate an ABC (black) pattern in wave 4 (pink).
A breakout could drop to Fibonacci targets around 124.50-125-125.50, where a bullish rebound is expected (green arrow).
An immediate bullish breakout (blue arrows) could take place if the price action reverses and passes above the local resistance zone.
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Good trading,
Chris Svorcik
The analysis was made with the indicators and the model of the SWAT method (simple wave analysis and trading). For more analysis and technical updates and daily waves, subscribe to our newsletter
