EUR Price Forecast: EUR/JPY Bearish Momentum Might Be Nearing its Final Stage
EUR/JPY Price Outlook, Charts and Analysis
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EUR/JPY– Bearish Momentum Continues
On May 14, the bearish momentum stalled, and since then EUR/JPY closed with a series of Doji patterns showing market hesitation. The downtrend trend picked up momentum on May 28 after closing below 23.6% Fibonacci retracement at 122.15. On May 31 the monthly candlestick closed with 3.2% loss at 120.94.
The (RSI) broke below 30 on May 30 and remained in oversold territory, reflecting the strength of the bearish momentum.
It’s worth nothing that EUR/JPY opened this week’s session with an exhaustion gap, following the breakaway gap on May 6 and the measuring gap in May 13. An exhaustion gap appears near the end of a market move.
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EUR/JPY DAILY PRICE CHART (JAN 2, 2019- JUN 3, 2019)
Looking at the daily chart we notice EUR/JPY closed below 121.30 moving the price to a lower multi- day trading range (119.78 – 121.30). This development could see the pair continue its down move with an increased likelihood of seeing the lower end of the range. Daily and weekly supports at 120.50, 120.33 and 120.10 should be monitored.
A close above 121.30 could mean the beginning of a rally towards 122.50. However, weekly and daily resistances at 121.49 and 121.66 need be watched closely. Additionally, a key resistance zone 122.00 – 122.17 remains in focus.
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EUR/JPY Two-HOUR PRICE CHART (May 23 – JUNE 3, 2019)
Looking at the 2-hr chart, on May 31 EUR/JPY rebounded twice from 120.49. Therefore, any break above 121.30 could rally the price towards the May 31 high, and if the pair breaks and remains above 120.49 then the next significant resistance would be at 121.66 followed by the aforementioned resistance zone at 122.00 – 122.17.
In turn, today EUR/JPY rebounded twice from 120.78. Therefore, a break below this threshold could lead the price to trade even lower towards the daily support at 120.52. The supports mentioned above need to be considered.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.