EUR/JPY Technical Analysis: Double top breakdown, eyes trendline support

• EUR/JPY's daily chart is reporting a double top breakdown.
• The pair risks extending losses to key ascending trendline support near 120.20.

EUR/JPY is currently trading at 120.69, the lowest level since Dec. 11, and risks falling to key trendline support near 120.24. 

The pair is trading well below the double top neckline support of 121.06. The breakdown indicates the rally from the September low of 115.86 has ended and the bears have regained control. 

Seasoned traders typically wait for confirmation in the form of a daily close below the neckline support. 

In this case, however, the downside momentum is quite strong. The US' decision to attack Iranian military personnel seems to have escalated things to a point of no return. 

The yen, therefore, may continue to draw bids, pushing the EUR/JPY pair down to 120.24 – the support of the trendline rising from Sept. 3 and Oct. 8 lows – as suggested by the double top breakdown. 

The 14-day relative strength index has also dipped into the bearish territory below 50.

Daily chart

Trend: Bearish

Technical levels