EUR/JPY Technical Analysis: Bear flag seen in hourly chart

• The EUR/JPY hourly chart has created a bear flag - a bearish continuation pattern. A break below the flag support of 126.00 would signal a resumption of the sell-off from the pole high of 129.01 and would open the doors to 123.00 (target as per the measured height method).
• The hourly relative strength index (RSI) has adopted a bearish bias (below 50.00), but the 14-day RSI is reporting oversold condition. So, the Aug. 13 low of 125.14 could hold for now.
• The path of least resistance remains to the downside as the 100-hour moving average is located below the 200-hour moving average.

Hourly chart

Spot Rate: 126.12

Daily High: 126.37

Daily Low: 126.05

Trend: Bearish below 126.00

Resistance

R1: 126.37 (Asian session high)

R2: 126.59 (5-day moving average)

R3: 126.99 (previous day's high)

Support

S1: 125.81 (previous day's low)

S2: 125.14 (Aug. 13 low)

S3: 124.62 (May 29 low)