EUR/JPY produced a bullish engulfing candle yesterday. However, the candle closed within a level, where the price had a rejection earlier. Thus, the pair is to decide to find its next route. If it produces a bearish reversal candle at the level, a breakout at the neckline may drive the price towards the South. On the other hand, a bullish breakout at the level of resistance may push the price towards the North. Let us now have a look at three vital charts.
Chart 1 EUR/JPY Daily Chart
The chart shows that the price consolidated at the level of 125.400 for several days. Yesterday’s candle came out as a bullish engulfing candle closing within the level of 126.730. The buyers may wait for the price to make a bullish breakout at the level of 125.400 and find long opportunities. In case of a bullish breakout, the price may find its next resistance around 129.000. On the other hand, if the level produces a bearish reversal candle, the sellers in the daily chart may wait for the price to make a breakout at the level of 124.650 to go short and drive the price towards the South.
Chart 2 EUR/JPY H4 Chart
The chart shows that after being bearish the price had a bounce at the level of 125.250 and headed towards the North. The price had a rejection at the last swing high and consolidated around the level of 126.370. As of writing, the last candle closed as a bullish engulfing candle. Thus, a breakout at the level of 126.800 may attract the buyers to go long in the pair and push the price towards the level of 127.685. On the other hand, if the level works as a level of resistance, the sellers may go short below the level of 126.370. The price may find its next support around 125.900.
Chart 3 EUR/JPY H1 Chart
The chart shows that the price consolidated around the level of 126.350 for several candles. Upon producing a bullish engulfing candle, the price has been heading towards the North. It may consolidate around the last swing high. A bullish breakout at the level may generate more bullish momentum and drive the price towards the level of 127.350. On the contrary, if the level works as a level of resistance, the price may head towards the South and finds its support around 126.350.
Considering these three charts, it seems that the bull has a slightly upper hand. However, unless the price makes a bullish breakout, the Bear holds the chance to make its move towards the downside too.