Today’s technical focus is on EUR/JPY, a pair showcasing a strong reversal amid the ongoing weakness in the Japanese Yen against nearly every major currency. What we’re witnessing here is nothing short of a technical masterpiece.
The most critical development? A false breakout below the green horizontal support, a classic trap for bears, clearly marked by the red rectangle. This fake-out quickly reversed, sending the price significantly higher. The next bullish confirmation came as EUR/JPY broke above the orange resistance, which has now turned into support—further solidifying the buy signal.
With momentum on its side, the first target is the black downtrend line, and at the current pace, we might reach that level today. A reaction from there is expected, likely leading to a pullback toward the orange support. If that happens, it could present an excellent opportunity to go long again.
For now, as long as the price stays above the green support, the bullish sentiment remains intact, and EUR/JPY is a buy. Let’s see if this textbook setup plays out as expected!