EUR/JPY developed a bearish momentum during the last week… It seems that this price action was developing wave 4 correction pattern and I think that bullish wave 5 is around the corner.
We will review different scenarios as the pair can either bounce for bullish momentum or expand the bearish momentum of wave 4.
This article will discuss the wave perceptive and expected scenarios for the pair during the coming days using wave pattern, support, and resistance and SWAT software.
EUR/JPY Bounce from 61.8% Fibonacci Level
The below chart shows that the pair developed a bearish ABC wave pattern of bearish wave 4 … In my view, the pair near to start the bullish momentum of 5 waves thus here are the main conclusions:
- The price bounced from 61.8% Fibonacci level, which is the maximum correction of wave 4.
- If price break 61.8% Fibonacci level this wave pattern will not be valid anymore.
- As wave traders Know that wave 5 target can be beyond wave 3.
For the moment I expect the bullish momentum of wave 5 to take place … Traders need to wait for the confirmations of wave 5 before trading this pair… In the next paragraph, we will discuss this development by using SWAT software.
EUR/JPY SWAT CHART
Now it’s time to use the SWAT 4-hour chart to determine the entry points according to the expected wave patterns… SWAT Chart shows a start of a new bearish momentum … Here are the main developments to consider:
- Price break the 21 EMA.
- We can consider this break as this entry point.
- Our target is the Wizz level 6.
- I advise traders always to protect their profit or use trailing stops.
So in my view, traders should trade the long opportunities only as it matches the expected wave pattern.
For new long setups, price will need to break above the 5th wizz level for potential intra-week setups towards level 6.
If price breaks below the 21 ema after hitting level 5, then a new bearish breakout could take place.
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