EUR/JPY dropped significantly yesterday and closed below the previous month’s low of 155.550. Technical analysis indicated a further decline in the coming days.

The price dropped below the major support levels of 156.840 and 156.00. Currently, the price is making a bullish correction and will possibly retrace back to the 156.840 level which now will act as a strong resistance level.

I am expecting the price will make a false breakout above the 156.840 resistance level to wipe out the sellers with smaller stoploss and then drop to new lows. Therefore, I have placed entry for this trade slightly above the 156.840 resistance level and stoploss above the previous high of 158.431.

The recent drop in the price of EUR/JPY and other JPY pairs has spurred speculations about potential intervention by the Japanese authorities as there is no technical explanation for this massive drop.

The price will possibly remain bearish in the coming weeks and months as EUR/JPY has been in a bullish trend for the last couple of years and Japanese authorities will possibly intervene again in the future.

Moreover, NFP data will be published this Friday which can cause volatility in the market. So, it is recommended to watch this trading those hours.

• EUR/JPY will possibly continue its bearish trend after retracing to the 157.070 resistance level.  
• This trade has been sent after considering both technical and fundamental perspectives.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:3.5.
• I would recommend watching this trade while the NFP data is published this Friday
• Good luck!

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