EUR/JPY testing double top – Can bearish engulfing get us more selling?

What’s up, traders.

The market seems to be a bit slow today as the investors are out for the summer holiday. As per the recent release, the Germany August Ifo business climate index jumped to 103.8 vs 101.8 forecast, underpinning the EUR/JPY.

Earlier today, we opened a forex trading signal to take a sell position below 128.97 to target 128.700. Here’s an update on our trade.

EUR/JPY – 4 Hour Chart

On the 4 – hour chart, the EUR/JPY is trading under a double top resistance level of 129.450. Here you can also see a bearish engulfing candle, which is suggesting a bearish sentiment of investors.

The immediate support prevails at 128.700 and the violation of this can extend the bearish rally until 128.250. On the flip side, the bullish breakout of 129.450 can lead the pair towards 130.250.