EURJPY has been in a clear well defined upward sloping channel since October 2020 and the 122 price level. Since the price has been making higher highs and higher lows inside a bullish channel but only recently we saw this channel being broken. This is an important event as it could be the start of a bigger reversal.

Blue lines - Fibonacci retracement levels

EURJPY has broken below the bullish channel. Usually when price breaks out of multi month channels, price pulls back at least towards the 38% Fibonacci retracement of the latest start of the trend. The start of this trend started back in October of 2020 when price was reversing to the upside from the 122 price level. The 38% Fibonacci retracement 129.30 area and we expect price to at least test this short-term Fibonacci support level. Price is vulnerable to a bigger decline, however a back test of the broken channel from below around 132 is also justified before moving towards the Fibonacci support levels.