It has been a volatile session so far, but the volatility is good when it’s derived from a scheduled economic event. The EUR/JPY has slipped more than 60 pips after the Chinese finance ministry confirms the 25% tariff on US goods which was earlier reported by a Chinese local news agency.

EUR/JPY – 4 Hour Chart

Technically, the market has traveled too far from its opening price of 130.778, yet the bearish trend looks really strong. If you are thinking of catching a quick retracement, I would suggest waiting a bit more. The reason behind this is a big bearish candle on the 4-hour chart. In the language of candlesticks, it’s called a bearish engulfing pattern. It shows there are more sellers in the market than buyers. Which means the next candle is also likely to be bearish.

Looking at the 4-hour chart, the EUR/JPY is heading south to a major support zone of 129.950. By that time, the leading indicators will also enter the oversold zone. This will be our chance to make money. The Japanese cross is expected to face an immediate resistance near 130.600 and 130.850.

EUR/JPY – Trading Plan

I’m looking to buy EUR/JPY above 129.950 with a stop below 129.650 and a take profit of 130.650 and 130.850. Good luck!