FX.co ★ Strategy of the day on EUR/JPY

The spot rate is currently testing the lower limit of its medium-term bearish channel at 119.90 suggesting a rebound. However, a break of this level will free a large potential and initiate a more violent bearish channel.
Technical indicators do not provide clear signals, but until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the lower limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 119.90 with the 1st objective at 120.50 and then at 120.70. A breakthrough of 119.70 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 119.90 with the 1st objective at 119.30 and then at 119.10 A breakthrough of 120.10 will invalidate this scenario.