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EURJPY D1(Daily) Chart Analysis – Bearish Divergence, ADX Indicator, Strong Support Zone
On the daily chart, we had a bullish rally which ended with a bearish divergence that has formed between the first high that has formed on 5th June 2020 and the second high that has formed on 1st September 2020 based on the MACD indicator, which we may consider as evidence of bearish pressure. Currently, it looks like a correction is happening, we have the first leg down followed by a pullback. While measuring this first leg using the fibonacci expansion tool we could see that the price still has room lower towards the strong support zone formed by the 61.8%(122.191) fibonacci expansion level and the 100%(120.406) fibonacci expansion level. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this short-term bearish view.
EURJPY H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Key Resistance Zone, Parabolic Sar, ADX Indicator
On the H4 chart, the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for has happened. The price which was moving higher has reached a key resistance zone formed by the 50%(124.727) – 61.8%(125.279) fibonacci retracement zones of the bearish trend pattern, respected it, and is currently moving lower. And, based on the Parabolic Sar the dots are above the price, we may consider this as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. So until this key resistance zone shown in the screenshot below (marked in red) holds my view remains bearish here and I expect the price to continue lower further.
Technical Analysis & Forecast Summary
EURJPY D1(Daily) Chart Analysis
Bearish Divergence, ADX Indicator, Strong Support Zone
EURJPY H4(4 Hours) Chart Analysis
Bearish Trend Pattern, Strong Resistance Zone, Parabolic Sar, ADX Indicator
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