EUR/JPY Price Analysis: Bear’s stars alligning for both short-term and swing-trading opportunities

Developing story

EUR/JPY has been in a long term bull trend since the start of may earlier this year and it has reached a supply zone on the monthly chart. 

So far, the bulls have managed to hold their ground, but they are tiring as momentum slows down in the 126 handle. 

This gives rise to another possible bearish correction on the monthly bullish trend

If one develops, there will be opportunities on both the short term charts and medium-term charts that offer day trading and swing trading setups.

The following is a top-down technical analysis of the euro and cross. 

In the immediate future, there are signs of a day trade in the making, but let us start from a market structure analysis from the monthly and work out way down to the hourly chart and potential trade setup.

EUR/JPY monthly chart

From a monthly perspective, EUR/JPY is in a supply zone and following such a long period of being in a bullish trajectory, a 38.2% Fibonacci to prior resistance can be expected.

The cross is also failing at daily support and the wick could be filled in:

EUR/JPY resistance structures

EUR/JPY has its work cut out below critical resistance structures.

EUR/USD daily chart

The euro is testing trendline support in supply territory, a break of which reinforces the downside case for the euro crosses. 

EUR/USD 4HR

The price is testing back above the trendline at resistance and familiar Fibonacci retracement levels that would typically to hold up the correction. 

EUR/USD 1HR resistance

A series of impulses and corrections so far point to correction at resistance, which brings us to the EUR/JPY cross…

EUR/JPY day trade lining up 

The conditions are all aligning for a short setup on the lower time frames and the euro is under pressure vs the greenback.

The hourly chart shows the price creeping towards resistance where a deceleration will open prospects for an entry on a lower time frame, such as the 15-minutes chart.

Price action will be monitored for a favourable entry with preferable risk-reward.

More to come from both a day trade and swing trading perspective as the price action evolves…