EUR/JPY continues to decline inside extended and well-formed Rising Wedge chart pattern identified by Autochartist on the 4-hour charts. The length of this chart pattern is equal to 112 candles. The overall Quality of this chart pattern is measured at the 6 bar level as a result of the low Initial Trend (rated at the 2 bar level) and higher Uniformity and Clarity (rated at the 8 and 9 bar level respectively). This chart pattern continues the long-term predominant downtrend visible on the daily and the weekly EUR/JPY charts.
This Rising Wedge encloses the clear-cut ABC correction to the previous daily downward price impulse from the end of October of 2011, which itself followed the completion of the similar ABC correction to the preceding longer-term down move from the start of April of 2011 (both ABC corrections labeled in red on the second chart below). The top of this Rising Wedge (point B on the chart below) formed when the pair reversed down from the strong combined resistance area lying at the intersection of the following technical resistance price levels: horizontal resistance level 103.00, 38.2% Fibonacci Retracement of the aforementioned preceding downward price impulse from the end of October of 2011, the 100-day simple moving average and the longer-term resistance trendline from the start of April of 2011. EUR/JPY is expected to decline further toward the lower support trendline of this Rising Wedge in the coming sessions.
The following daily EUR/JPY chart shows the longer-term picture of this currency pair's movement:
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