Technical Analysis – EURJPY consolidates as bearish tone softens



EURJPY buyers are fighting back after recording a one-month low of 128.24, where a support base has developed during this past week. That said, the 200-period simple moving average (SMA) is endorsing a broader neutral bias, while the bearish 50- and 100-period SMAs are defending the descent in the pair. Worth mentioning is a nearing bearish crossover of the 200-period SMA by the 100-period one, which would confirm selling interest has ramped up.

The Ichimoku lines are indicating that downward forces are struggling, while the short-term oscillators are transmitting mixed signals in directional momentum. The MACD, in the negative region, is remaining buoyant north of the red trigger line, while the RSI is encountering some difficulty in overstepping the 50 threshold. The positively charged stochastic oscillator is promoting upside gains in the pair.

If the price pushes over the Ichimoku lines, which are hovering around 128.75, resistance could then evolve around the nearby 128.95 high and the approaching 50-period SMA at 129.10. Not much higher, the cloud’s lower band and the 129.23-129.44 resistance border may prove difficult to conquer. Yet, if the bulls succeed, they could then aim for the 200-period SMA at 129.72, which if breached too, would reinforce upside confidence bringing the 129.96-130.08 resistance barrier into play.

If the Ichimoku lines around 128.75 halt moves higher, sellers may face initial downside limitations from the 128.24-128.42 hardened floor. Sliding below this boundary, the pair could snag at the 128.00 handle as it directs for the 127.30-127.50 upside defence, which extends back until February 2021. A break beneath the support foundation could intensify the bearish bias with a drop headed to the 127.00 mark.

Summarizing, EURJPY is exhibiting a neutral-to-bearish tilt and a break below the 128.24-128.42 immediate floor could boost downside tendencies. That said, for the bullish mood to improve, the price would need to climb north of the 130.00 mark.

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.