On Tuesday, the Japanese yen continues to soar from investor’s nerves over tensions between the United States and Iran. Today, Tehran said that the US sanctions enduringly blocked the path to diplomacy between the two countries.

On the other hand, the single currency euro is also getting stronger against the US dollar. The Euro hit a three-month high of $1.1412, having gained 2.0% from a two-week low of $1.1181 touched a week ago. However, the Euro isn’t able to stand against the strength of the Japanese yen.

So far, EUR/JPY has dropped over 0.26% to trade at 121.950, but I wanted to draw your attention towards Cypher pattern on 3- hour chart. The pattern has completed C to D wave around 122.300 and has started pushing EUR/JPY lower. Typically this kind of pattern drives strong bearish moves, which is why EUR/JPY has dropped to 121.750 support area.

Now the thing is, EUR/JPY may continue heading lower towards 120.950, but on the way, it has to meet a substantial intraday support level of 121.750. So the failure to break below this level could also trigger a bullish trend in EUR/JPY.

Support Resistance
122.19 122.43
122.05 122.54
121.8 122.78
Key Trading Level: 122.29

Consider staying bullish above 121.750 and bearish below the same to target quick 50 pips on both sides. On the upper hand, 122.30 is likely to act as a substantial resistance and may push EUR/JPY lower.

Good luck!