Currency Pair: EUR/JPY Chart: 15 Min Charts Short-Term Bias: Long
After touching a low of 160.18 last week, a correction looks to be underway for the euro-yen.
Analysis Update
The EUR/JPY has come under heavy selling pressure during the past few hours of trading, and has broken well below the lower channel. After dipping to 160.0, we expect a near-term correction to unfold within the next few trading session.
The euro-yen looks to have found short-term support near 160.0, and should bounce back to trade within the channel. The oversold RSI signal warrants us to hold our short-term bullish outlook, and we expect the pair to test 162.28 (50.0% Fib level) for resistance. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
After touching a low of 160.18 last week, a correction looks to be underway for the euro-yen. Price action has dipped below the lower channel is the last few hours of trading, and has triggered an oversold RSI signal.
The euro-yen has found support at 161.07 (21.4% Fib level), and should work its way back to the top of the channel. We expect the EUR/JPY to reverse course in the near-term as a bullish divergence in the RSI continues to unfold, and may test 162.28 (50.0% Fib level) for resistance. Price action for the pair should hold within 160.1 to 163.1 for the next few trading session, but may break to the downside in the next few months. Be sure to check out Jamie’s Technical Outlook for the additional information on the major currency pairs.