EUR/JPY 15M Chart: Rising Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Although the current situation in EUR/JPY implies a short-term rally, just like in GBP/USD, the emerging pattern indicates growing downside risks. There is a good chance the Euro will find support circa 113.80 in order to launch a new attack on the red trend-line, but the rising wedge is a bearish pattern, and eventually the green-trend line is likely to be broken. This will pave the way for a decline down to 111.40, namely the Monday's low, although there are also potential good nearby support levels at 113.66 (200-period SMA) and at 113.41 (daily S1). The distribution between the bulls and bears in the SWFX market confirms the negative outlook, being that there are more longs (63%) than there are shorts (37%).
© Dukascopy Bank SA
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