EUR/JPY Long-Term Analysis: Bearish
Since August 20, EUR/JPY has been correcting upward to resume an uptrend. The currency price has broken above the 21-day SMA but faces rejection at the 50-day SMA. A break above the moving averages will signal the resumption of the uptrend. However, rejection at the recent high will prolong the bearish trend. Meanwhile, on June 21 downtrend; a retraced candle body tested the 50% Fibonacci retracement level. The retracement indicates that the pair will fall to level 2.0 Fibonacci extensions or level 125.93.
EUR/JPY Indicator Analysis
The pair has fallen to level 49 of the Relative Strength Index period 14. It indicates that there is a balance between supply and demand. The 21-day and 50-day SMA are sloping downward indicating the downtrend. EUR/JPY is above the 80% range of the daily stochastic. It indicates that the currency pair has reached the overbought region.
Technical indicators:
Major Resistance Levels – 133.00, 134.000, 135.000
Major Support Levels – 128.000, 127.000, 126.000
What Is the Next Direction for EUR/JPY?
On the 4 hour chart, the currency pair is in an uptrend. On August 23 uptrend. a retraced candle body tested the 61.8% Fibonacci retracement level. The retracement indicates that EUR/JPY will rise to level 1.618 Fibonacci extensions or level 129.84. From the price action, the pair has reach level 129.50 but it is facing rejection at the recent high.
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