FxWirePro: After 8 weeks of whipsaws on EUR/JPY, bear rally plummets below 7-DMA, adjoining handle pattern in major trend

After inverse saucer on EURJPY, adjoining handle pattern is now on cards as interim bulls seem to be absolutely exhausted at 21EMAs (refer monthly charts). 

The previous upswings exhausted at the stiff resistance of 123.7751 (refer weekly plotting), the price behavior is going in whipsaws from 8-weeks, any break below strong support at 121.1232 likely to drag price declines.

As stated in our recent technical write up on this pair, rallies have extended upto 124 levels or 21-DMA on daily and EMA on monthly plotting. Subsequently, the bear swings seem to be gaining selling interest at this level.

Currently, on weekly plotting, RSI (14) has been converging below 55 levels (while articulating) to the declines that signal the strength in the downtrend, while stochastic curves are also evidencing %D crossover that signal strong selling momentum but this has been little indecisive on monthly terms although bearish biasedness is seen.

Thus, the 6 months of consolidation phase now seems to be deceptive and extension of dips seems most likely as both leading indicators at this juncture indicate shrinking bullish momentum and lagging oscillators have been indecisive but slightly bears favor.

On intraday plotting, the intensified bear swings manage to break below strong support at 121.1232; we could foresee more dips in the days to come.

For intraday trading perspective, it is advisable to buy tunnel spreads which are binary versions of the debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 121.32 and lower strikes at 120.6854 levels.