EUR/JPY Outlook: Euro May Resume Downtrend Against Japanese Yen
EUR/JPY Price Outlook,
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EUR/JPY– Lower but Still Trendless
Last week EUR/JPY traded lower, breaking the June 21 low 120.95. However, the pair rebounded on Friday to 120.81- its lowest level in nearly seven weeks, failing to end the current sideways move .
Last week the Relative Strength Index (RSI) dropped from 48 to 35 indicating that sellers could be on their way to resuming the downtrend.
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EUR/JPY DAILY PRICE CHART (April 20, 2017- JULY 22, 2019) Zoomed Out
EUR/JPY DAILY PRICE CHART (DEC 27, 2016 – JULY 22, 2019) Zoomed in
Looking at the daily chart we notice that on Wednesday EUR/JPY moved to a lower trading zone 119.78 – 121.25 then on Friday, the price tested the high-end of the zone but failed to close above it.
If EUR/JPY remains trading below the high-end of the aforementioned trading zone, this could embolden the sellers to put an end to the current trendless move and press the price towards the low -end of the zone. However, the weekly support zone highlighted on the chart (Zoomed in) should be monitored.
In turn, the sideways move may continue if the buyers succeed in leading the pair to close above the high-end. This mean the price may rally towards 122.52. Nonetheless, the weekly resistance levels marked on the chart (zoomed in) should be watched along the way.
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EUR/JPY Four-HOUR PRICE CHART (June 26 – JULY 22, 2019)
Looking at the four-hour chart, we notice on Friday EUR/JPY rebounded near the July 18 low at 120.78. Currently, the pair eyes the neckline of a double bottom hence, if the price breaks and remains above 121.28 this suggest a possible rally towards 121.77.
It's worth noting that a break above 121.50 may lead the price towards the July 15 high at 121.85 however, the July 16 high at 121.68 needs to be considered.
On the other hand, a break below the July 18 low at 120.78 could send the price towards 120.30 although, the weekly support at 120.50 should be kept in focus.
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.