EUR/JPY[1] is poised to mark an outside-day reversal off major weekly support and leaves the broader short-bias vulnerable heading into the close of the week. These are the updated targets and invalidation levels that matter on the EUR/JPY weekly price chart. Review my latestWeekly Strategy Webinar[2] for an in-depth breakdown of this trade setup and more.
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EUR/JPY Price Chart – Weekly
Notes: EUR/JPY dropped into a critical support confluence at 120.02/25– a level defined by the 61.8% retracement[4] of the 2016 advance and the 100% extension of the 2018 decline. Price is now poised to mark an outside-day reversal off fresh two-year lows on the back of today’s European Central Bank interest rate decision and the battle lines are drawn.
Initial resistance stands with the July high-week / weekly reversal close at 121.74 – note that the median-line of the broader descending pitchfork[5] formation we’ve been tracking off the 2018 highs stands just higher. A breach / close above this zone is needed to suggest that a more significant low may be in place near-term with such a scenario targeting a rally back toward the key inflection zone at 123.35/65.
A break / close below this key support confluence exposes the January (yearly) swing low at 118.82 – weakness beyond this threshold would be needed to validate a break of the yearly opening-range[6] and risk substantial losses towards the lower parallel / 2017 low-week close near ~1.17
