As long as daily closing prices remain above the 122.50 support, correctional move to the upside should be expected.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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EUR/JPY symbol on the MT4 platform
Key support levels: 122.50, 122.00
Key resistance levels: 123.30, 124.60
A few days ago, on September 21, EUR/JPY tested the potential bottom at 122.51. At that point, the price has rejected the average price downtrend trendline as well as the bottom of the extended ascending channel. Today we could have seen the formation of the double bottom as price rejected the lower trendline of the extended ascending channel for the second time.
Therefore, as long as daily closing prices remain above the 122.50 support, correctional move to the upside should be expected. Price could rise as high as 124.60 resistance area confirmed by multiple indicators. First is the 50% Fibs of the overall downside move and the second is 88.6% Fibs applied to the previous corrective wave to the upside. Then there is a second average-price downtrend trendline (in red) and finally, it is the extended 200 Simple Moving Average.
In addition, the Fibonacci Time Zones indicator shows that the next cycle is about to start, which can result in the beginning of the upside move. Looking at the next cycle marked “5”, it is pointing out to the October 4 and might suggest the end of the current, potentially bullish cycle.