Daily Forex Update: EUR/JPY

The downtrend on the 240-minute EUR/JPY chart has alerted a Channel Down Emerging Pattern. Emerging Patterns indicate that prices are still trading within the formation's support and resistance, and they allow for a more proactive trade set-up. This Channel Down pattern has an Autochartist Initial Trend reading of two bars, indicating that the current market cycle on the 240-minute chart is more sideways-moving than the downtrend that helped form the Channel pattern. This affects the possible entry strategies: the narrow, sideways range that characterizes an accumulation cycle is one in which prices could stall at downtrend line resistance (at 109.65 [A]), or breakout higher given enough bullish sentiment. A stall would allow for a short-sell opportunity, in anticipation of prices moving lower after hitting selling pressure at the Channel pattern's top line.