BEARISH ON EUR/JPY: HEAD & SHOULDERS PATTERN
Bearish clues:
- Broke down the 100 and 150 Exponential Moving Averages
- Rebound on the 78.6% Fibonacci retracement level
- Relative StrengtH Index (RSI) is below the level of 50 (sign of downtrend)
- Head & Shoulders pattern
Fundamental news:
- The drop in US Treasury yields is outpacing that of European yields, giving levity to EUR/USD rates, while sinking EUR/GBP and EUR/JPY along the way (Source: Daily FX / IG)
Objectives:
EUR/JPY could goes down to the support (neckline of the Head & Shoulders pattern) at 128.000 level and then, if the Head & Shoulders pattern is confirmed (wait for a pullback), EUR/JPY could goes down to the strong bearish support at the 125.000 level. The theoretical objective of the pattern is the 122.000 level (which corresponds to the 38.2% Fibonacci retracement level). Before this level, there is a strong support at the 126.500 (which corresponds to the 61.8% Fibonacci retracement level). With a stop loss at 131.000 (just above shoulders to be sure but stop loss can be placed at 130.000 (1 ATR) for a better Risk-to-Reward ratio) and a take profit at 125.000 (support), we could get a nice Risk-to-Reward ratio of 2.16
Feel free to share, comment and give your opinion if it is constructive ;)
DISCLAIMER: This is not investment advice
- Broke down the 100 and 150 Exponential Moving Averages
- Rebound on the 78.6% Fibonacci retracement level
- Relative StrengtH Index (RSI) is below the level of 50 (sign of downtrend)
- Head & Shoulders pattern
Fundamental news:
- The drop in US Treasury yields is outpacing that of European yields, giving levity to EUR/USD rates, while sinking EUR/GBP and EUR/JPY along the way (Source: Daily FX / IG)
Objectives:
EUR/JPY could goes down to the support (neckline of the Head & Shoulders pattern) at 128.000 level and then, if the Head & Shoulders pattern is confirmed (wait for a pullback), EUR/JPY could goes down to the strong bearish support at the 125.000 level. The theoretical objective of the pattern is the 122.000 level (which corresponds to the 38.2% Fibonacci retracement level). Before this level, there is a strong support at the 126.500 (which corresponds to the 61.8% Fibonacci retracement level). With a stop loss at 131.000 (just above shoulders to be sure but stop loss can be placed at 130.000 (1 ATR) for a better Risk-to-Reward ratio) and a take profit at 125.000 (support), we could get a nice Risk-to-Reward ratio of 2.16
Feel free to share, comment and give your opinion if it is constructive ;)
DISCLAIMER: This is not investment advice
Komentarz:
Head & Shoulders pattern seems to be invalidated. Let's see!