The euro is probably facing the end to its long-term uptrend against the Japanese yen with the current consolidation phase that took a shape of a double top chart pattern. Spanning through the entire first week of December, both tops are almost perfectly uniform and well pronounced. Of course, the question still remains as to whether the exchange rate will break the neckline.
You can see the two peaks marked with the top yellow line. The bottom yellow line marks the necklines of the pattern. I am setting my pending entry to where the cyan line is (at 10% of the pattern’s height below the neckline). I will set my take-profit to the level marked with the green line. It is placed at 100% of the pattern’s height below the neckline. I will set my stop-loss to the high of the breakout candle or to the high of the preceding one if the breakout candle is trading mostly below the neckline. I will skip a bullish breakout from this pattern unless it first forms an ascending triangle.
I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this EUR/JPY pattern. You can trade it using my free Chart Pattern Helper EA.
Update 2020-12-08: A decisive breakout to the downside had occurred yesterday at 21:50 GMT, triggering my entry at 125.958 with stop-loss at 126.254 and take-profit at 125.398. Unfortunately, it was followed by a no less decisive pullback, triggering my stop-loss order on the pair today at 8:46 GMT:
If you have any questions or comments regarding this double top on the EUR/JPY chart, please feel free to submit them via the form below.
