FxWirePro: Repetitive bearish candles, volumes piling up, rejects at upper channel line - Short EUR/JPY for 129.50

EUR/JPY is steaming up with heaps of bearish indications by leading oscillators in addition.

Most probable scenario: More downside potential towards 1^st target - 129.50, on break below those levels can drag towards even up to 128.05 levels in medium term.

Adverse scenario: Alternatively, if the pair manages to seize any good hints and post some abrupt rallies can be possible maximum upto 133.50 which would again be channel line resistance.

It has rejected the channel line resistance several times in the recent past at 133.764.

Previous downtrend offers more shorting opportunities by generating some bearish patterns such as spinning top, long legged and gravestone dojis.

These bearish candles form such as spinning top, long legged and Gravestone dojis at 133.880, 133.863 and at 132.937 respectively lingering below downward trend line.

The prices are forming a sloping channel in it has been struggling to break resistance at 133.096 levels.

Most importantly, massive volume build ups on every price decline confirms downtrend (you can see grey shaded areas on monthly charts).

As a result, both weekly and monthly prices have slipped below 10DMA, hence it could be used as downtrend would drag further. Currently, attempting towards resistance at 133.096 levels.

Leading oscillating indicators are moving in sync with prevailing price declines (see monthly charts for RSI is directly proportionate with price line), this convergence can be attributed as bearish continuation.

Currently, RSI (14) trending near 48.5416 levels (while articulating) with downward convergence to the dipping prices.

There is a clear sign of selling sentiments as a result of overbought pressures, it alarms bears trying to take over the declining rallies as the slow stochastic noises with %D line cross over above 80 levels on daily (current %D line flashes at 63.0496).

Hedging recommendation: Contemplating certain bearish swings or any abrupt brief upswings, we recommend buying calendar spread that takes care of certain yields regardless of swings.