EUR/JPY produced a bearish engulfing candle yesterday in the daily chart. The price after being bullish for a while found its resistance and consolidated around a level. Since the level produced a bearish engulfing candle, the sellers may look for short opportunities in the pair. Major intraday charts look bearish as well. Let us now have a look at three vital charts.
Chart 1 EUR/JPY Daily Chart
The chart shows that the price made a bullish move and had a rejection at 122.000. It consolidated around the level for several candles. Then, yesterday it produced a bearish engulfing candle. Thus, the sellers may go short below yesterday’s lowest low and drive the price towards the South. The price may find its support around 119.300. On the other hand, if the price does not make a bearish move but consolidate around 120.550 and ends up producing a bullish reversal candle, the buyers may push the price towards the level of 124.000.
Chart 2 EUR/JPY H4 Chart
The chart shows that the price had a rejection at the level of 122.000 twice. At the second rejection, the price produced a bearish engulfing candle. Since then the price has been heading towards the South with good bearish momentum. The sellers may wait for the price to consolidate and get a bearish reversal candle to offer them a short entry. The price may consolidate around the level of 120.500. The chart shows that the price may find its next support around 119.400. On the contrary, if the price makes a bullish move upon consolidation, it may find its resistance around 121.100.
Chart 3 EUR/JPY H1 Chart
The chart shows that the price upon making a double top has been heading towards the South. It made a bullish correction yesterday and headed towards the South again. The sellers may wait for the price to make a bullish correction again to go short in the pair. The price may find its resistance around 120.650. The sellers may keep their eyes at the level to get a bearish reversal candle and go short in the pair. The price may find its next support around 120.225. If the price breaches through the level of 120.650, the price may head towards the North and find its resistance around 120.900.
The daily chart looks very bearish. The H4 and the H1 sellers may have to wait to go short in the pair to get a better risk-reward. Considering these three charts, the pair may end up producing a bearish candle in the daily chart today.