Since early March, EUR/JPY has surged nearly 1,000 pips, providing us with several excellent trading opportunities. However, as the rally matures, many early buyers are beginning to take profits, leading to a noticeable slowdown in the uptrend. On Friday, the pair formed a Death Cross, a well-known bearish signal, prompting us to enter a direct sell trade at 161.30 in anticipation of a broader correction.
Our bearish outlook is reinforced by a double top pattern at 163.00, which represents a lower high compared to the previous swing high at 164.00. This formation suggests a weakening bullish momentum, increasing the likelihood of a trend reversal. If our analysis is correct, we aim to take profit near 159.00, aligning with the crucial 61.8% Fibonacci retracement level—often a strong support zone.
To mitigate potential losses while allowing sufficient market fluctuation, we are implementing a stop-loss with a 1.2% distance. This strategic risk management approach ensures our trade remains protected while maintaining the flexibility needed for price movement. As we monitor the market’s response to these technical signals, we anticipate a profitable opportunity in the coming sessions.
Our bearish outlook is reinforced by a double top pattern at 163.00, which represents a lower high compared to the previous swing high at 164.00. This formation suggests a weakening bullish momentum, increasing the likelihood of a trend reversal. If our analysis is correct, we aim to take profit near 159.00, aligning with the crucial 61.8% Fibonacci retracement level—often a strong support zone.
To mitigate potential losses while allowing sufficient market fluctuation, we are implementing a stop-loss with a 1.2% distance. This strategic risk management approach ensures our trade remains protected while maintaining the flexibility needed for price movement. As we monitor the market’s response to these technical signals, we anticipate a profitable opportunity in the coming sessions.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.