Technical Analysis – EURJPY Forecast

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Technical Analysis - EURJPY Forecast

Hi Traders! Today I am sharing with you the EURJPY forecast and technical analysis post. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting and useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.

EURJPY D1(Daily) Chart Analysis – Key Resistance Zone, False Breaks, Bearish Divergence, Parabolic Sar, ADX Indicator

On the daily chart, the price which is moving higher has reached a key resistance zone formed by the 61.8% (125.487) Fibonacci expansion level of the first wave and the 61.8%(126.406) Fibonacci expansion level of the second wave we have. The price has created a false break of this key resistance zone and also it has created multiple false breaks of the previous highs(marked in green dotted lines) which we may consider as evidence of bearish pressure. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 3rd December 2020 and the second high that has formed on 7th January 2021 based on the MACD indicator. Also based on the Parabolic Sar the dots are above the price which we may consider as evidence of bearish pressure. 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 another evidence of bearish pressure. So everything looks good here for the bears, we may now move down to lower timeframe and see if we can find evidences supporting this bearish view.

Technical Analysis - EURJPY Forecast

 

 

EURJPY H4(4 Hours) Chart Analysis – Bearish Divergence, Parabolic Sar, Key Resistance Zone

On the H4 chart, after the strong bearish move currently, it looks like a correction is happening. We had a double wave to the upside with the price creating a bearish divergence between the first high that has formed on 20th January 2020 and the second high that has formed on 22nd January 2020 which we may consider as evidence of bearish pressure. Also based on the Parabolic Sar the dots are above the price here as well which we may consider as another evidence of bearish pressure. In addition to this, we had a strong support zone that had formed and the price which was moving lower had broken below this zone and is holding below it. Currently, this strong support zone is acting as a strong resistance zone for us. We also have the 200 moving averages coinciding in this area which makes this level a key resistance zone for us. Until this key resistance zone holds my view remains bearish here and I expect the price to continue lower further.

Technical Analysis - EURJPY Forecast

Technical Analysis & Forecast Summary

EURJPY D1(Daily) Chart Analysis 

  • Key Resistance Zone, False Breaks, Bearish Divergence, Parabolic Sar, ADX Indicator

EURJPY H4(4 Hours) Chart Analysis

  • Bearish Divergence, Parabolic Sar, Key Resistance Zone

 

Trading Tips

It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.

Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.

You will also find a pretty extensive database of educational materials here in the blog – just use the search or check out the Forex Education section above.

Not sure how to enter a trade? Spot reversals (bounces)? Not sure how to spot breakouts?

I invite you to join us in our live market analysis, on daily basis, and improve your trading with us.

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Also, you can get one of our strategies free of charge. You will find all the details here

 

If you have any further questions, don’t hesitate to drop a comment below!

 

To your success,

Vladimir Ribakov
Certified Financial Technician

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