EUR/JPY: Intraday Short Opportunity as Resistance Holds Firm

Technical Setup & Rationale

Good morning, KoraFX community. Let's look at EUR/JPY today. The pair is currently trading around 161.72, showing a -0.3% dip over the last 24 hours. We've seen it push up towards the 162.44 resistance level, which also marked the top of its day range, but it failed to sustain that move. This rejection at a key resistance, coupled with the ongoing sideways trend on the higher timeframes, suggests that we could see a retrace lower. My analysis points to an intraday short setup.
I am looking for an entry around the 162 mark. This level has acted as a psychological pivot recently, and a retest of this area, following the failed breakout above 162.44, would offer a favorable entry point. The market dynamics indicate that sellers are stepping in when the pair approaches these higher levels within the current range.

Risk Management and Confluence

For this short setup, my stop loss is placed at 163.2. This level is strategically positioned above the recent high of 162.44 and the next significant resistance level, providing ample room for minor fluctuations while protecting against an invalidation of the bearish thesis. My target for this trade is 159.7. This take profit level aims to capitalize on a move below the immediate support at 161, pushing towards the lower end of the recent consolidation and potentially testing the ground before the stronger 155 support.
The confluence is strong here. We have a clear technical rejection at established resistance, a moderate intraday downtrend developing within a broader sideways market, and a risk-reward ratio that favors this setup