News & Analysis
Eightcap Forex technical insights; Continuation patterns developing EURJPY and GBPJPY
As the trade war continues to hurt risk, tonight we’re seeing patterns setting up on a few major JPY pairs. If they confirm they could set-up new legs lower. Let’s take a look at the daily charts below.
EURJPY – Overall trend remains down, after a push higher buyers where knocked back after forming a new lower high. Buyers held sellers setting up a new HL making a start to the current triangle pattern. 128.53 stands as the current pattern resistance, these patterns can confirm as bearish continuation patterns as price continues to be squeezed. If it completes and breaks lower, there a possibility the break out could run 180 pips lower as per normal measured move rules.
GBPJPY – as like the above, made a new lower high before declining to a new higher low on the 19th of Jun. Price has consolidated into a pendant pattern. These patterns can go either way but analysts lean towards the last legs direction. In this case, it was a down leg. Traders will be watching this pattern for a breakout to show the new direction balance. These patterns can also be measured to give an idea of a possible break out target. If we see a downside breakout off a measured move the target could be seen 200 pips below.
Good trading from Eightcap
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