The price is trading in the red right now and looks determined to turn to the downside again after the minor bounce back. Could drop much deeper as the rate has retested an important dynamic resistance (support turned into resistance) and because the Yen could be boosted by another Nikkei’s drop.
JP225 is trading in the red and seems poised for more declines, but we’ll see what will happen because has opened with a gap up in the morning. The Nikkei has shown some oversold signs on Monday when has failed to close below the 19309 previous low and now we could see a minor consolidation on the Daily chart.
We may have some volatility in the upcoming hours as the Euro-zone is to release significant data, the Flash Manufacturing PMI and the Flash Services PMI reports will be published.
EUR/JPY retested the inside sliding parallel line (SL) and now could retreat again. Is trading above the 38.2% retracement level, but a valid breakdown will confirm a further drop in the upcoming period. The perspective remains bearish as long as the rate is trading within the minor descending pitchfork. A failure to retest the upper median line (uml) will send the rate tumbling towards the median line (ml) and towards the 50% Fibonacci line (ascending dotted line).
The price action could confirm a minor Head and Shoulders pattern if will stabilize somewhere below the 128.00 psychological level. Price will drop towards the median line (ML) of the major ascending pitchfork if this pattern will be confirmed.