Technical outlook and chart setups:
The EUR/JPY pair is trading around the level of 135.50/60 now, preparing to drop lower into 134.00/20 before turning bullish. Please also note that the pair is forming an engulfing bearish candlestick pattern on the H4 chart, indicating a continued drop lower. As depicted here, the pair could form a gartley and drop towards the levels of 134.00 which is coinciding with the fibonacci 0.618 retracement as well. It is hence recommended to remain flat for now and turn long around 134.20 with risk at 132.00. Immediate support is seen at 134.00/20 (interim) followed by 132.00 and lower, while resistance is seen at 137.50 followed by 139.00 and higher.
Remain flat and look for an opportunity to buy at the levels of 134.00/20.
The material has been provided by InstaForex Company – www.instaforex.com