- In second half of the previous trading session the currency exchange rate made an unexpected turn around near the 130.05 mark and started to fall.
- The reason behind pair’s inability to reach the weekly R1 at 130.64 might be related to existence of a larger with two reaction highs and two reaction lows.
- If this pattern is actually in force, then the Euro has to continue to lose value against the Yen until the rate will reaches its southern boundary for the third time.
- But, in order to do that, the pair has to bypass once again the March 2016 high at 128.18. Most likely the new attempt is going to fail as well.
- On the other hand, the pair has a chance to succeed if some fundamental event will accelerate the fall.
The ongoing fall of the currency exchange rate suggests that it is, indeed, moving in larger descending channel. In support of this version speaks the fact that the pair has successfully bypassed the March 2016 high at 128.18, which previously forced it to make a rebound.
At the same time, the currency rate failed to break through the weekly S1 at 127.82 straight away. Nevertheless, the pair is still expected to slide to the bottom boundary of the senior channel. A summary of various technical indicators support this assumption, sending strong sell signal for the 1H, 5H and 1D timeframes.
Similar position also holds traders themselves, as the average market sentiment remains 60% bearish. Given that today there will be no fundamental data releases anymore, the pair should begin the new trading week in a new junior ascending channel.
Check out our trading platform: