FxWirePro: Spot out EUR/JPY imminent bears on shooting star and hanging man patterns in minor trend, major trend edgy at 61.8% Fibos

As stated in our previous post in technical analysis section, EURJPY has shown considerable price rallies upon below mentioned chart patterns, but for now, the trend seems little weaker.

Technical chart and candlestick patterns formed – The stern resembling bullish engulfing patterns with big real body have occurred at 130.855 and 132.478 levels that helped in forming inverted head and shoulder chart pattern to complete bullish rout. The pair forms inverted head and shoulder pattern with head at 124.903, shoulder 1 at 127.868 and shoulder 2 at 126.643 levels.

On the contrary, shooting star and hanging man patterns have occurred at 132.234 and 131.895 levels respectively which are bearish in nature, these candlestick patterns are countering the previous buying sentiments (refer daily chart).

Consequently, you can make out steep slumps that slide below 7DMAs upon the above stated bearish patterns, for now, more slumps seem to be on cards below 21DMAs as both leading and lagging indicators signal intensified selling momentum and bearish trend continuation. 

While on intermediate trend, consecutively shooting star, hanging man and spinning top patterns pop up at around 61.8% Fibonacci levels from the lows of June 2016. On the contrary, hammer patterns have occurred at 128.830 levels sensing support at 124.742 (i.e. 38.2% Fibonacci levels) to counter the bearish sentiments (refer monthly chart). Bulls, on this timeframe, resume after retracing 38.2% Fibonacci levels.

While both leading and lagging indicators signal bearish strength & momentum and weakness remains intact on the monthly terms.

Trade tips: On trading perspective, at spot reference: 131.747 levels, capitalizing on today’s upswings, it is advisable to snap the rallies and buy one touch put option, use strikes at 130.9258 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX keeps dipping further until expiration.

Alternatively, ahead of PMI data announcement today, we advocate shorts in futures contracts of mid-month tenors with a view to arresting potential dips.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 20 levels (which is mildly bullish), while hourly JPY spot index was at -24 (mildly bearish) while articulating at 06:25 GMT. For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex