EURJPY as we expected from June 20th when it broke out of the bullish channel, has reached the 38% Fibonacci retracement which was our first pull back target. Short-term trend remains bearish as price is making lower lows and lower highs.
Blue lines - Fibonacci retracement
Red horizontal lines- Fibonacci extensions
Next Fibonacci extension target is at 128.55. Next Fibonacci retracement target is at 127.80. However as the RSI points out, the bearish trend is weakening as the RSI is making higher lows when price is making lower lows. This is just a warning and not a confirmation of the end of the downward move. Now that our target has been reached, traders need to be cautious.