Technical Analysis – EURJPY points to more losses ahead of ECB policy meeting



EURJPY entered a downhill race following the peak at a four-month high of 133.47 in the four-hour chart, correcting below its shorter-term simple moving averages (SMA) and more recently below the Ichimoku cloud, which kept the bears under control on Wednesday.

The downturn in the RSI and the MACD is gaining fresh momentum in the bearish territory as the Stochastics are drifting lower again despite their latest bounce off the oversold area, all flagging additional losses ahead for the market.

The 38.2% Fibonacci of the 127.92 – 133.47 upleg at 131.35 is the nearest support zone for an upside correction, but the lower line of the descending channel seen at 131.00 could immediately guarantee a halt in declines. If the latter fails to act, the sell-off could sharpen towards the key restrictive region formed between the 50% Fibonacci of 130.70 and the 130.50 level. Another failure here would snap the upward pattern, switching the outlook in the broad picture back to neutral.

On the upside, a forceful move above the channel and the 23.6% Fibonacci of 132.16 would shift the bias back to positive, likely raising buying orders up to the 132.60 resistance. If upside pressures further intensify, the pair will probably take a rest near last week’s limitations around 133.20 before crawling to the top of 133.47.

In brief, EURJPY is holding a bearish bias in the very short-term picture ahead of today’s ECB policy meeting. The next turning point is expected to develop within the 131.35 – 132.00 zone.

 

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.