EUR/JPY is trading in the red on the H4 chart at the time of writing. It’s located at 129.82 level and it could resume its drop after invalidating further growth.
The pair has registered only a false breakout above a former higher high signaling a bearish reversal. Dropping below the former lows could activate a sell-off in the short term. The Yen could take full control if the Nikkei stock index resumes its drop.
As you can see on the H4 chart, EUR/JPY registered only a false breakout above 130.66 higher high. It has also failed to stabilize above the weekly R1, so now it could go down.
It has dropped also from the ascending pitchfork’s body signaling that the buyers are exhausted in the short term. Closing and stabilizing below the S1 (129.85) could confirm a deeper drop ahead.
S3 (128.60) could be used as an important downside target if EUR/JPY continues to drop in the short term.
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