In a 4-hour chart, EUR/JPY has formed “Hammer” candle earlier on downtrend. As it is known, this model is a signal for upward movement. It was confirmed thereafter.
This candle formed after the currency pair had not managed to break out the resistance level at 114.20 – 114.40 and sharply fell to 108.00, where bulls started to rule.
In addition, the currency pair has successfully broken the correction level Fibonacci of 38.2 and now it is testing the correction level Fibonacci of 50.0, the breach of which can lead to the testing of the resistance level at 111.80 – 112.00. Stop orders should be set below 108.00, as a breakout of this mark will lead to the reaching of new multi-year lows.