Overview:
EUR/JPY's subsequent sharp fall suggests that decline from 126.00 a month ago had resumed to 122.20 (strong support). It should also be noted that the price is still trapped between 125.20-123.26 and it has been set below strong resistance at the level of 126.00. The pair has already formed a strong resistance at the level of 126.00 and it is now approaching it in order to test it. Therefore the fact that apan's yen will be a downside momentum is rather convincing. The structure of the fall does not look corrective, it is likely to indicate a bearish opportunity below 126.00 (you should keep in mind that the weekly pivot point is at 122.40). It will be a good sign to sell below 126.00 with the first target at 124.30 and it will call for downtrend to continue moving towards 122.40 (around 50% of Fibonacci retracement levels in the H4 chart). Furthermore, it should also be said that the price at 122.20 will probably form a double bottom and call for a strong support. So it will be saturation around 122.20 to rebound the pair. The market might be also going to start showing the bullish signs. In other words, it will be a good sign to buy above 122.20 with the first target of 123.36 and continue towards 125.80.
Observations:
It should be noted that the market was not stable, and the trend was not clear (a highly volatile market). Range: 104.00 pips. The value of 50% Fibonacci retracement levels is: (High + Low) / 2 = 1.2241 (the key level to confirm a bullish market). Volatility is 129.67, so the market is highly volatile. Double bottom at 122.20 (the market will indicate a bullish opportunity at the level of 122.20)If you have any questions or requests, please feel free to contact me: mourad.elkeddani@analytics.instaforex.com.