EUR/USD, EUR/JPY Technical Forecast: Failure at Crucial Resistance
EUR/USD and EUR/JPY Outlook
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EUR/JPY, EUR/USD – The Buyer’s Struggle
On Friday, EUR/USD rallied to its highest level in nearly three weeks at 1.1109 then closed in the green for the second week in a row. In turn, EUR/JPY rallied to its highest level in over six weeks at 120.01 and closed the weekly candlestick with a 1.5% gain.
However, the Relative Strength Index (RSI) failed to cross above 50 on EUR/USD indicating to the buyer’s lack of momentum to lead the price. In turn, the oscillator remained flat on EUR/JPY pausing the current uptrend momentum.
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EUR/USD Daily PRice CHART (May 1, 2018 - SEp 18, 2019) Zoomed Out
EUR/USD Daily Price CHART (July 1 – Sep 18, 2019) Zoomed in
Looking at the daily chart we notice, on Friday the pair failed to remain above the neckline of double bottom pattern. Additionally, the pair closed below the downtrend line originated from the June 25 high at 1.1412 highlighting the bearish outlook of EUR/USD at this stage.
Its also worth noting that today, the pair tests returning to the lower trading zone 1.1050 – 1.0912. Hence, a close below the high end of the zone could press the price towards the low end. Further close below the low end may see EUR/USD trading even lower towards 1.0812. Nonetheless, buyers need to pay a close attention to the weekly support levels underscored on the chart (zoomed in).
On the flip-side, a close above the high end could push the price towards the vicinity of 1.1215-20. Although, the weekly resistance levels underlined on the chart should be kept in focus.
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EUR/JPY Daily PRice CHART (Jan 2, 2017– Sep 18, 2019) Zoomed Out
EUR/JPY Daily PRice CHART (June 24 – SEp 18, 2019) Zoomed In
From the daily chart we notice, at the start of the week EUR/JPY opened with a gap to the downside then yesterday rebounded from the high end of current trading zone 117.30 – 119.78 reflecting the lack of momentum to move to a higher trading zone.
Currently, EUR/JPY may be heading towards the low end of the zone contingent on clearing the weekly support area and level marked on the chart. Further close below the low end could press the price towards 114.80. However, the weekly support area underlined on the chart needs to be watched closely.
That said, any close above the high end of the zone, could push EUR/JPY towards 121.25. Further close above this level could see the pair trading even higher towards 122.52. Although, the weekly resistance levels underlined on the chart would be worth monitoring.
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.