EUROJPY has been very bearish on the daily chart. The price has been heading towards the South with good momentum by making new breakouts. Friday’s daily candle came out as a good-looking bearish candle with almost no rejection from the downside. The sellers of EUROJPY are going to go short after every upside correction as far as the daily chart is concerned.
Let us have a look at the EUROJPY-Daily Chart
The Daily Chart
The price has been down trending from the level of 126.770. In fact, there has been a double top as well. A bearish engulfing candle initiated the trend, which always gives extra strength to a trend. To go more with it, the price made an explicit breakout and a correction at the level of 123.670. This was the neck line of the double top. Considering all these factors, the daily chart suggests that the price will be bearish in the coming days.
Let us have a look at the H4-EUROJPY chart to find out the levels that might be held as the resistance levels and produce the short signal.
The H4 Chart-1st Potential Resistance
The level of 121.175 looks very promising to be the 1st resistance if the price starts having retracement from where it stands now. The level is significant because the price made a breakout after having a little consolidation and the last candle started right from the level. However, if the level is breached by the price, then the 2nd potential level of resistance might be this one shown on the chart below
The H4 Chart-2nd Potential Resistance
The chart suggests that the level of 121.395 is a significant level as well. The 2nd last candle started trending from around the level and it was held by the price at the time of consolidation.
In both cases, the price might come down to the level of 120.000 without having too many pauses. The level of 120.585 and 120.340 might be the level of support where the price might have a little bounce.