EUR/JPY 4H Chart: Rising Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Euro's rally from 121.70 is about to come to an end. The main reason to be bearish on the pair is the major down-trend line near 128 yen. Resistance there is also strengthened by the weekly R2 and March high. At the same time a little closer to the spot price, there is the monthly pivot point at 126.14, which is fully capable of preventing further appreciation as well. As a result, we expect EUR/JPY to violate the lower boundary of the emerging pattern in the nearest future. The first target will then be yesterday's low at 124.70, followed by the monthly S1 and weekly PP at 124.25/06. A yet another ‘sell' signal is provided by positioning of traders in the SWFX market: 73% are already bulls and only 27% are bears.
© Dukascopy Bank SA
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