Facts:
- Both MACD and RSI have formed a bearish divergence with a lower high.
- A potential double-top formation has occurred, signaling a possible trend reversal.
- The 78.6% Fibonacci retracement level has repeatedly acted as a strong reversal zone.
- The market anticipates two rate cuts in the Eurozone, while Japan is expected to implement one rate hike.
Recommendation:
- Transaction: Short position on EURJPY at the market price.
- Target: 158.644
- Stop: 164.893
Opinion:
EUR/JPY is on the verge of a trend reversal after forming a double-top pattern. The MACD is trending lower following a bearish crossover, while the RSI remains in bearish divergence, confirming a lower high. A stop-loss is placed above the previous high to invalidate this thesis, while the take-profit target is set at the 38.2% Fibonacci retracement level, which has previously served as support. Additionally, potential new tariffs on the Eurozone could push the ECB toward a more dovish stance, further pressuring the currency.
