EUR/JPY Intraday Technical Analysis
The spot rate approaches the upper limit of its medium term bearish channel at 100.50 suggesting a decline. However a break of these levels will free a large potential and initiate a violent bullish channel.
Technical indicators do not provide clear signals but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. The spot rate evolves on the levels of the superior band supporting the hypothesis of a violent movement in case of failure.
The spot rate is currently testing the upper limit of its channel then we recommend 2 scenario: The first one is the hypothesis of a decline then we recommend a sell on the level of 100.50 with the 1st objective at 99.80 and then at 99.60. A break through 100.70 will invalidate this scenario. The second scenario is a break of its resistance then we recommend a “buy stop” that’s means to buy the spot rate as soon as it has broken through its resistance of 100.50 with the 1st objective at 101.10 and then at 101.30. A break through 100.30 will invalidate this scenario.