EUR/JPY Short Setup | October 24, 2018

Please be noted that EURJPYhas evidenced the sizeable price slumps upon below mentioned candlesticks and chart patterns. For now, the trend continues to be weaker.

Technical chart and candlestick patterns formed – The stern shooting star patterns have occurred at 132.336 and 132.234 levels (on both monthly and daily terms respectively). The stiff resistance is observed at 133.236 levels.

Consequently, these bearish patterns plummet prices below 7DMA & EMAs, both leading and lagging indicators signal bearish momentum and downswings continuation.

While on the major trend also, shooting star evidences price drops below EMAs (monthly chart). For now, the current trend most likely to retrace upto 38.2% fibonacci levels, bearish swings are backed by both momentum oscillators as both leading indicators ( RSI & stochastic curves) show downward convergence that signal bearish strength & momentum and weakness remains intact on the monthly terms.

Trade tips: On trading perspective, at spot reference: 128.858 levels, it is advisable to snap any abrupt rallies and bid tunnel put option spreads, use upper strikes at 129.2341 and lower strikes at 128.2280 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX keeps dipping further until expiration.

Alternatively, we advocate shorts in futures contracts of mid-month tenors with a view to arresting potential dips.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -109 levels (which is bearish ), while hourly JPY spot index was at 144 ( bullish ) while articulating at 07:30 GMT