Hi Traders! Today I share with you my EURJPY short term forecast and technical analysis post, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on this pair in order to find possible trading opportunities. 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! Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
EURJPY H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, ADX Indicator
On the H4 chart, the price which was moving higher reached a key resistance zone that has formed based on the 61.8%(144.927) Fibonacci expansion level of the first wave. The price respected this zone and is currently moving lower. Also, we have a bearish divergence that has formed between the first high that has formed on 8th June 2022 and the second high that has formed on 22nd June 2022 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
EURJPY H1(1 Hour) Chart Analysis – Bearish Convergence, ADX Indicator
On the H1 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 144.008 and the second high that has formed at 144.243 based on the MACD indicator. The price then moved lower and broke below the last low at 142.668 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening. 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 which we may consider as yet another evidence of bearish pressure. Until the key resistance zone (marked in red) holds my short term view remains bearish here and I expect the price to move lower further after pullbacks.
Technical Analysis & Forecast Summary
EURJPY H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, ADX Indicator
EURJPY H1(1 Hour) Chart Analysis
- Bearish Convergence, ADX Indicator
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 short term 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.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
