EURJPY has delivered an excellent example of how Elliott Wave analysis, combined with a well-defined resistance zone, can help traders identify high-probability reversal opportunities before the market makes a major move.
Back on June 16, we highlighted EURJPY approaching a very important resistance area between 186.30 and 187.50. At the time, the rally from the May lows was viewed as an A-B-C corrective recovery, while the decline from the April highs had already unfolded in five waves, suggesting that the larger bearish trend could still be active. Rather than chasing the rally higher, we warned that traders should be alert for reversal signals once price entered this resistance zone.
On our chart, this resistance zone was highlighted using our Trader Reversal Box — the yellow box shown between 186.30 and 187.50.
The purpose of this Box is simple:
- It identifies areas where Elliott Wave projections, Fibonacci levels, and previous market structure align.
- It marks zones where risk-to-reward conditions become attractive.
- It helps traders prepare for potential reversals instead of reacting emotionally after the move has already started.
Importantly, the yellow box is not an automatic entry signal. Instead, it serves as a decision-making area where members can monitor price action and look for confirmation before entering a trade. In this case, EURJPY rallied directly into the Trader Reversal Box and then stalled exactly where we expected sellers to become active.
From Resistance to Sharp Selloff
Following the rejection from the highlighted zone, EURJPY reversed aggressively lower. The pair turned almost perfectly from the 186.32 resistance area, which also represented an important swing level from April. Once selling pressure appeared, the decline quickly accelerated into what now looks like an impulsive bearish sequence.
Price not only rejected the resistance zone but also broke beneath the lower trendline support, confirming that the recovery was likely completed and that a larger bearish cycle was resuming. The market subsequently declined toward the 184 area, delivering a substantial move away from the original reversal zone.
With EURJPY already declining sharply from the highlighted resistance area, some traders may now be securing profits or adjusting positions as the market moves further away from the original trade location. After all, successful trading is not only about finding opportunities but also about managing them properly once the market starts moving in your favor.
While additional downside may still be possible, the market has already delivered a meaningful move, making profit protection and trade management increasingly important considerations.
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