Since the second half of October, the price on the EUR/JPY weekly chart has been trapped in an inside bar formation (consolidation). However, at the end of last week, there was a breakout thru the bottom of the formation.
The drops were deepened this week, where the price was supported by the trend line running from the low of June 2016. Further actions of the EURJPY traders are now of great importance.
Keeping the quotes above the trend line gives a chance to rebound. In this scenario, the key horizontal resistance is around 133.12. The dynamic resistance of the medium channel EMA 10/20 is closer. The price has been under this channel for 10 weeks.
An alternative is to break the trend line down. However, this will not be a good opportunity for speculation due to the proximity of key support at 124.90. Only if sellers cross the area within this level will they open the way for further price declines in the direction of 122.60.
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