Bulls in the EUR/JPY market seem to have lost momentum shortly after breaching the resistance at the 174.70 level. The market dipped sharply afterward. However, price action is making a minor recovery ahead of the Eurozone’s Consumer Price Index (CPI) data release tomorrow.
Key Price Levels:
Resistance Levels: 175.00, 180.00, and 185.00
Support Levels: 170.00, 165.00, and 160.00
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EUR/JPY Records Limited Gains
Since falling below the 20-day Exponential Moving Average (EMA), the EUR/JPY market has only seen minimal gains. This indicates a less volatile euro compared to the yen. However, the current session has managed to push the pair back above the EMA curve.
Nevertheless, the market remains significantly below the technical resistance at 175.00. Consequently, the Stochastic Relative Strength Index (SRSI) lines have fallen sharply into the oversold region. The leading RSI line has deflected in response to the limited upside correction. A bullish reversal will likely depend on positive Eurozone economic data.
EUR/JPY Bulls Appear Depressed Below Most EMAs
While EUR/JPY price action appears to be recovering on the daily chart, the 4-hour chart tells a different story. Here, price action continues a bearish correction below the 20-, 50-, and 100-day EMA curves. Over the past three sessions, downward forces have produced small but consistent downward corrections.
Additionally, the SRSI indicator lines have formed a bearish crossover in the overbought region. The indicator lines are now heading downward towards the 80 mark. Therefore, unless the upcoming CPI data is strong, the market may decline towards the support level of $171.00 or lower.
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