EUR/JPY Price Prediction: Testing top of the range - next move could be down

• EUR/JPY is testing the top of a multi-week range and could be about to reverse and fall. 
• Although price action has not yet reversed, the MACD is diverging bearishly with price.  

EUR/JPY tests the top of a nine-and-a-half-week range at around 163.50 as it continues unfolding its short-term sideways trend. 

EUR/JPY 4-hour Chart 

Given the principle of technical analysis that "the trend is your friend" the odds favor a continuation of this sideways mode. If so, then the next move for EUR/JPY will probably be a decline back down towards the range floor in the 154s. 

There are no reversal signs from the actual price yet, however, and it is too early to say with any confidence if the pair will break lower. A move below 161.91 (October 8 low) would be required to supply the additional bearish confirmation. For stronger confirmation price must break below the trendline for the up leg at around 161.70 (dotted black line on chart). The next downside target for EUR/JPY would be at about 158.32 - the October 1 as well as September 30 lows.

The Moving Average Convergence Divergence (MACD) momentum indicator is diverging bearishly with price (red dotted lines on chart). Whilst price is making higher highs, MACD is  declining. This is further evidence a downside move could be about to unfold.

On the other hand, a decisive break above the range highs would indicate a breakout of the range and the evolution of a new short-term uptrend. A decisive move would be one characterized by a longer-than-average green candlestick which cleared the range high and closed near its high, or three green candles in a row breaking above the top of the range.