Bears are taking control of the EUR/JPY at the start of the week.
Bears looking for a test of daily support on the downside.
At the start of the week, the EUR/JPY was under pressure, with the price falling from the upper 131 level and breaking through the late June support structure in the 131.20s.
Price has since moved on to test the mid-June close and opening lows, with an eye on the even lower 130.04 June lows.
On a daily basis, the risk to the upside is illustrated, while on an hourly basis, the danger is contrasted.
The daily M-formation is a bullish chart pattern that suggests the price will soon approach the neckline.
There is, however, room to the downside, and the hourly chart is negative.
The market has already corrected to a Fibonacci of 38.2 percent of the previous bearish hourly impulse. This could result in renewed supply for a negative extend that tests further into daily support.
If the price continues to rise from here, the next resistance structure will be tested.
Failures there could result in the downward extension.
With that said, a breach of the resistance will bring the daily M-neckline formation’s back into focus as the most likely possibility./n
