FX.co ★ EUR/JPY

The provided weekly chart for EURJPY (Euro vs. Japanese Yen) displays a macro-level perspective, illustrating a significant historical bullish trend that has recently transitioned into a corrective phase. The primary trend from mid-2024 to early 2026 was distinctly upward, characterized by a series of higher highs and higher lows. However, the market structure has shifted; following the peak established in early 2026, the pair has formed a pronounced rounding top or a complex head-and-shoulders-like distribution pattern. The price action is currently testing a critical horizontal inflection point at the 175.970 level, which previously acted as a major resistance zone in late 2025 before being broken. This level is now serving as the primary support, marking a pivotal battleground for the medium-term trend. If this support fails, the structural integrity of the long-term uptrend will be compromised, potentially signaling a deeper trend reversal. Conversely, a firm hold above this line would suggest a mere retracement within the broader bullish cycle. Delving into the technical indicators, the momentum is decidedly bearish. The RSI(14) is currently at 36.03, indicating weak momentum and approaching oversold territory, but it has not yet reached the extreme levels typically associated with a sharp reversal. More tellingly, the MACD (12,26,9) is deeply negative, with the MACD line at -1.9917 and the signal line at -1.3590. The MACD histogram is expanding downwards, confirming that bearish momentum is accelerating. The current market structure is defined by a sharp sell-off from the highs, breaking below the dynamic support of the red moving average. The nearest major resistance is now the psychological 181.695 level, which aligns with recent swing highs and the moving average. The nearest major support is the immediate 175.970 level, with a break below opening the door to the 168.825 area. The bearish divergence between the price highs in late 2025/early 2026 and the declining RSI/MACD values was a precursor to this correction. Scenario 1: Bearish Continuation (High Probability) Given the strong downward momentum on the MACD and the RSI trending lower, the most immediate scenario is a breakdown below the 175.970 support. If the weekly candle closes decisively below this line, it would confirm the failure of the previous resistance-turned-support. This would likely trigger a cascade of stop-loss orders, pushing the price toward the next major support zone at 168.825. In this scenario, the market structure would confirm a medium-term bearish trend change, and any rally back toward the moving average would likely be met with selling pressure. Traders would look for short entries on rallies, targeting the 168.825 level. Scenario 2: Bullish Reversal (Low Probability Short-Term) Alternatively, the 175.970 level could hold as a floor. If the price forms a bullish reversal candlestick pattern (such as a hammer or bullish engulfing) at this support and the RSI begins to curl upward from the 36 level, it would indicate that the selling pressure is exhausted. This would set up a mean-reversion trade targeting the 181.695 resistance level. However, for this to be a sustainable trend change, the MACD histogram would need to begin contracting toward zero, and the price would need to reclaim the red moving average. Until that occurs, this remains a counter-trend bounce. Trade Setup & Summary The EURJPY is at a critical decision point. The bias is currently bearish, supported by negative MACD and weak RSI. The market is sitting on a knife's edge at 175.970. · Trade Setup (Bearish): Consider short positions if the weekly close confirms below 175.970. Stop loss should be placed above the recent swing high or the moving average (roughly 182.00). Target 1 is 168.825, and Target 2 is 162.390. · Trade Setup (Bullish): Aggressive traders could look for a long position if a bullish reversal pattern forms at 175.970, with a tight stop below 175.00. Target the 181.695 resistance. Summary: The chart shows a bearish correction within a long-term uptrend. The immediate focus is on whether 175.970 holds. A breakdown is the higher probability scenario given the indicator alignment.