FxWirePro: EUR/JPY seems weaker from hereon after reaching channel resistance – shooting star on intraday evidences dips

We traced out a bearish shooting star pattern at peaks of rallied at around 131.659 that has evidenced a steep dip on 4 hourly chart, currently back to back dojis at territory appeared to signify the weakness in this pair.

We could foresee anytime the bearish pressures can burst out as you can observe on the EOD charts, the price line has line reached channel resistance and leading oscillator (slow stochastic and RSI) has popped up divergence to the previous rallies, which would interpret this as an early signal for selling pressures in the weeks to come.

Remarkably, RSI on daily terms has been directly proportionate to the price behavior. Currently, on 4-hourly charts RSI showing downward convergence near overbought zones (75 levels while articulating) with the dipping prices.

The slow stochastic noises with bearish crossover above 80s on daily charts (current %D line flashes at 87.99906). So, if the current breach sustains the existing channel resistance at 131.234 on a closing basis for consecutive days would bring in more bullish speculation for next resistance at 129.490 levels but as of now the probabilities seems unlikely to hold this level (considering intraday bearish sentiments).

Retrospectively, the prices have tested upper Bollinger bands and rising momentum is weakened at that juncture while on intraday charts MACD is likely to bearish crossover shortly it is lagging indication to the contraction in price rallies.

Hence, keeping 128.465 in mind bears can speculate this pair downwards, but there is a clear sign of bulls creating selling opportunities for long term bears as a result of overbought pressures So overall, EUR/JPY is blistering up with heaps of bearish indications by leading oscillators in addition.

Contemplating certain bearish swings and abrupt brief upswings also, we recommend buying any calendar spread that takes care of certain yields regardless of swings.