EURJPY testing broken channel support, look for bullish price action signal

After the EURJPY pair broke the channel resistance level at 134.445, it surged higher and found some solid resistance level at 136.550.From that level, the sellers took control of this market and pushed the pair significantly lower in the global market towards the major support level at 133.110.Most of the retail traders were waiting for another retest of the major channel support level at 131.37.However, the bulls took control of the market and pushed the pair higher above the channel resistance level. Prior to the last trading week, the pair dropped from the critical resistance level at 136.266 and currently testing the broken channel support level at 134.607.

EURJPY daily chart analysis

Figure: EURJPY testing the broken channel support level

From the above figure, you can clearly see that the pair is currently testing the broken channel resistance level. Most of the professional price action traders are waiting for a bullish price action confirmation signal to place fresh long orders at the current price level. If the bulls manage to take control of this market from the current level, we will see another retest of the high critical resistance level at 136.631.On the contrary, a daily closing of the price below the channel support level will ultimately lead this pair towards the next support level at 131.37.This level is going to play a very crucial role for the long-term investors since a break of this level will confirm the end of the medium term bullish trend of this pair. On the contrary, a daily closing of the price above the high of 5th January 2018 will bring stronger bullish rally.

EURJPY weekly chart analysis

EURJPY heading towards weekly support level 134.25

In the weekly time frame, the overall bias for the EURJPY pair remains extremely bullish. Currently, the pair is slowly heading towards the major weekly support level at 134.25.From that level, we might see some decent bullish bounce and any bullish price action confirmation signal in the lower time frame will trigger the long orders of the expert traders. If the current support level manages to create strong bullish pressure, the pair will ultimately head towards the next critical resistance level at 136.612.A weekly closing of the price above that level will bring strong bullish momentum which will eventually lead this pair towards the next major resistance level at 140.922.

On the downside, we need to break below the critical support level at 134.25 to see a further bearish rally. A clear break of that level will ultimately lead this pair towards the weekly support level at 131.21.From that level, we might see some false spike towards the 200 weekly SMA (green line).Considering all the technical parameters, the overall bias for the EURJPY pair remains strongly bullish. So any bearish correction will intensify the optimistic EURO bulls to execute fresh long orders in this pair. So it’s better to look for buying opportunity as long as the critical support level at 131.21 holds.