Market News & Analysis

EURJPY holding for a new leg lower?

May 17, 2019 | Forex News

Looking at the EURJPY daily we can see buyers have started to stall the decline from a previous low. The point of the low which has also now formed the base of a descending triangle pattern which are normally seen as continuation patterns in downtrends. This setup is a little different due to the long term low touch but if confirmed should act like a normal continuation pattern. 

For sellers to confirm the current EURJPY continuation pattern they will need to break the base and close below the baseline. If this occurs traders could be looking for a move of 115 pips lower going by measured move rules. This rule states that a target after break out is the length of the start of the pattern. In this case 115 pips. Please note this is a guide and not a guarantee that price will hit 115 pips below if the price breaks out. We could see a deeper or shorter move depending on how the market reacts.

On the flipside, if buyers maintain the base and break above 123.25 we’d start thinking that this EURJPY pattern could be a fail.

Good trading from EightCap

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