The EURJPY is presumed to sustain its dwindling trend in the upcoming week as the price continues to navigate within the bearish channel that began weighing the pair since the end of April. Last week, the pair continued its stair-like drop as it fell beneath multiple support levels along the 99.46, 98.48 and the 97.76 marks to reach a near twelve-year low of 95.58. In fact, the pair dropped a hefty 293 pips last week in a testament to the strength of the bears. Although the pair has recovered modestly, the price seemingly met tough opposition from the 97.08 psychological handle as it consolidated after a brief encounter.

Scrutinizing the four-hour chart, the Bollinger Bands(20) is supporting the bearish disposition for the pair as the latest candlesticks are still traversing within the lower half of the bands. With the layers all sloping downwards, the indicator is likely laying out the descending path for the pair to pursue in the coming days. The Stoch(5,3,3) is also signaling a return to the bearish trend as its %K and %D lines are nearing the overbought threshold. Should both indicator lines reach the overbought space, expect the price to quickly get its descent underway. Finally, the MACD(12,26,9) is depicting the underlying strength of the bears as its signal line and histogram remain lengthy within the negative space to signify that the bias remains tilted to the downside.

Continued turmoil from the Euro Zone debt crisis is deemed to weaken the Euro further as the markets remain wary of Spain’s banking strains and the possibility of a Greek exit from the currency bloc. Likewise, the European Central Bank’s meeting on Wednesday is also foreseen to be a key event. A somber assessment from the ECB, raising the possibility of further rate cuts or easing, could bring in more losses for the single currency. Hence, a short position is advisable.