It is a while since we didn’t look at the eurjpy pair and I would say that right ahead of the NFP and ECB we are having an interesting technical setup.
What you see on the chart above is the 4h time frame on the pair and one thing that strikes the eyes is an elongated flat right at the beginning of the corrective wave and from that moment on we are looking for a possible contracting triangle as these formations appear as the entire leg of a triangle or only as part of a leg of a triangle.
I would say that wave a blue there is a triple combination that is followed buy a contracting triangle as a b wave blue or a double combination for the same wave. It really makes no difference as the outcome should be the same: two corrective wave should be followed by either an impulsive move to the downside, and in this case it is a flat we are looking for, or another corrective wave that should for the c wave blue of a contracting triangle.
In both cased price should move to the downside on a break of 141.14 level and the first target should be 140, the psychological level, while the second and final target should be anywhere between 138.50 and 139 levels.
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