EUR/JPY Price Analysis: H&S pattern in formation sees downside below 142.30

• A conclusion of H&S formation will bring a sheer downside move.
• The 50-and 200-EMAs have turned flat which indicates a slowdown in upside momentum.
• A bearish range shift by the RSI (14) will weaken the shared currency bulls.

The EUR/JPY pair is falling sharply after the conclusion of a short-lived pullback towards 143.50 in the Asian session. On a broader note, the pair is in a correction mode after failing to sustain around a multi-year high, recorded on Monday at 145.63.

The ongoing formation of a Head and Shoulder chart pattern on an hourly scale is claiming more weakness in the counter ahead. Usually, an H&S formation denotes a tad longer inventory distribution, which leads to a sheer downside after a breakdown.  

The cross has surrendered the support of the 50-period Exponential Moving Average (EMA) at 143.39 and is declining further towards 200-EMA at 142.83.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range and is expected to skid inside the bearish range of 20.00-40.00, which will trigger a downside momentum.

A decisive break below Wednesday’s low at 142.30 will drag the cross towards September 7 low at 141.41, followed by September 2 high at 140.75.

Alternatively, a break above September 9 high at 144.73 will send the cross towards Monday’s high at 145.64. A breach of the latter will drive the asset in unchartered territory towards the round-level resistance at 147.00.

EUR/JPY hourly chart