The Elliott Wave formation on EURJPY suggests we’re in the midst of a corrective phase, with the currency pair possibly gearing up for a descent. After completing an ascending wave (4) that has retraced to the 0.382 Fibonacci level, a bearish wave (5) seems imminent, indicating the potential for a SHORT opportunity.
The Fibonacci retracement levels drawn from wave (3) provide a clear structure for the anticipated move, with the 1.129 and 1.618 extensions of wave (1) presenting possible targets. The recent price rejection near these key Fibonacci levels, alongside the exhaustion of the upward momentum, aligns with a classic setup for an impending downtrend.
Given the current risk sentiment and the JPY’s status as a safe-haven asset, a rise in market volatility could see the JPY strengthen against the EUR. Traders might consider a SHORT position as the pair begins to pivot from the retracement high, with stop-losses strategically placed above the wave (4) peak to manage risk effectively.
This setup is contingent on the pair's interaction with the critical Fibonacci levels, so close monitoring is essential. Adherence to risk management practices will be crucial to navigating the potential shifts in this currency pair.
The Fibonacci retracement levels drawn from wave (3) provide a clear structure for the anticipated move, with the 1.129 and 1.618 extensions of wave (1) presenting possible targets. The recent price rejection near these key Fibonacci levels, alongside the exhaustion of the upward momentum, aligns with a classic setup for an impending downtrend.
Given the current risk sentiment and the JPY’s status as a safe-haven asset, a rise in market volatility could see the JPY strengthen against the EUR. Traders might consider a SHORT position as the pair begins to pivot from the retracement high, with stop-losses strategically placed above the wave (4) peak to manage risk effectively.
This setup is contingent on the pair's interaction with the critical Fibonacci levels, so close monitoring is essential. Adherence to risk management practices will be crucial to navigating the potential shifts in this currency pair.
Trade closed: target reached
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