Hi Traders! EURJPY bearish setup is forming at the moment. A detailed analysis of this setup is as follows:
EURJPY Daily Chart:
On the daily chart we have a bearish momentum and the price which is moving lower has created lower highs. Whereas we had higher highs on the MACD forming a potential hidden bearish divergence. We may consider this as a confirmation for bearish pressure. We will look for more confirmations on lower timeframes in order to join this sell trade.
EURJPY H4 Chart:
On the H4 chart we have a double wave up and the second leg of this cycle has already reached the 61.8 fibo extension of the first leg. We also have a magnet zone that has formed slightly higher based on the 38.2% – 50% fibo retrace of the special cycle and the 100 fibo extension of the double cycle. In addition to this we have a potential bearish divergence that is forming at the moment which we may consider as a evidence for bearish pressure. So we may expect a bearish reversal to happen from here or we might get one more push higher with the price reaching the magnet zone and a reversal to happen from there. The price has created a perfect uptrend line and once we get a valid breakout of this trend line we may start looking for sells.
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