EUR/JPY: bearish breakout
- Ichimoku Cloud bearish;
- ADX and DI bearish;
- RSI bearish.
The EUR/JPY cross-rate printed a bearish breakout pattern on the four-hour timeframe (see the chart setup below). The rate went out of the Ichimoku Cloud, forcing both Conversion and Base lines to so. The leading span extended the ebarish surplus as the price charted a fresh low, breaking through a static horizontal support at 138.480 yens per Euro (previous lowest close rate).
The ADX and DI indicator points to a robust momentum as the mainline is well above the zero level, and it’s not bouncing back down yet. The red line is above the green one, and the surplus is not narrowing as well. The Relative Strength Index is getting close to the oversold zone, which might limit the downside action for some time. A sideways consolidation could help the oscillator to reload and open the road for the bears to push the rate even lower.
R1: 140.301 (Ichimoku Conversion line);
R2: 140.481 (Ichimoku Base line);
S1: 137.845 (recent bottom);
S2: 137.000 (round-figure extension).