EURJPY made a strong divergence pattern with the help of RSI in May and marked an end to the bullish impulsive structure. It was time for a deep correction but eventually ended with a minor degree of correction at 129.65-129.94 which brought the pair into over sold condition under H4 and H1 intraday time frames. EURJPY was able to quickly recover and corrected its RSI under all the intraday time frames and landing itself near the daily and weekly pivot. A bullish engulfing was created by the market - reversing from 50% fibb and ending near the 61.8fibb, but if we pull our fibb level to its lowest lows i.e 121.20, then EURJPY had just reversed from the strong 61.8 fibb retracement level, which might push the pair a bit higher towards its previous breakout i.e 131. We are not within a falling wedge, with its confirmation waiting to turn it into a bearish channel by provoking dovish momentum but for that to happen we will have to wait for a bearish impusle from current market price. MACD is also portraying some bearish momentum in the market being welcomed for a further down side move. 

BULLISH & BEARISH CONDITIONS/ POSSIBILITIES :

So as we have a bullish engulfing and a so called corrective structure being completed, its degree of correction will be confirmed by the awaited impulse, on the current trend we are more on the side of bears to take over the market after providing a breakout last week and now its next stop would be  129.20 which is our next strong support. In worst case scenario a breakout above 131.00 - would drive the pair towards its monthly pivot which lyes at 132.00 and further continuation of hawkish sentiments in the market. but until we have it below the aforementioned resistance, the odds would be in favour of the bears.   

EURJPY D1

Jul 12 2021