- EUR/JPY is experiencing a pullback within the downtrend that began in early November.
- A break below the November 22 low is expected to trigger further declines, with lower lows likely to follow.
EUR/JPY has established a descending sequence of peaks and troughs since the October 31 peak, signaling a potential short-term downtrend. As trends typically extend in technical analysis, the likelihood of the pair continuing to lower lows is high.
EUR/JPY 4-hour Chart
The next downside target for EUR/JPY is the 158.11 swing low from September 30. A break below 159.90 (November 22 low) would confirm the bearish move. Currently, the pair has pulled back to the 161.60s, offering an entry point with a favorable risk-reward ratio, unless the correction shifts into a reversal.
