GBP/JPY & EUR/JPY Face Key Resistance Levels - JPY Price Weekly Forecast
EUR /JPY and GBP/JPY Technical Analysis
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GBP/JPY, EURJPY – Trendless Pattern
On Oct 21, EUR/JPY rallied its highest level in over three months at 121.47. Since then the price has not been able to overtake this high. On Tuesday, the pair corrected lower and broke below 120.28.
Similarly, GBP/JPY has stuck in a sideways move since mid-Oct, as buyers are unable to continue rallying the price nor sellers are able to take the lead.
The Relative Strength Index (RSI) remained nearby 50 on EURJPY indicating the price’s lack of momentum to trade in a clear direction. Meanwhile, the oscillator remained flat above 50 on GBPJPY emphasizing stalled uptrend move.
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EUR/JPY Daily PRice CHART (Mar 20, 2017 – Nov 15, 2019) Zoomed Out
EUR/JPY Daily Price CHART (July 1 – Nov 15, 2019) Zoomed in
Looking at the daily chart, we notice on Tuesday broke below the neckline of double top pattern eyeing a test of 119.00 handle. Yesterday the pair declined to a lower trading zone 117.30 – 119.78. However, the price has not been able to close below 50-day average, reflecting seller’s hesitation at this stage.
Thus, a close above 120.28 would negate double top pattern and reflect more seller’s hesitation. This could open the way for buyers to take charge and to push EURJPY towards 121.25. Although, the daily resistance level underlined on the chart (zoomed in) should be considered.
On the other hand, another close below the high end of the zone could increase the likelihood for sellers to resume bearish price action towards the low end of the zone. However, the weekly support levels underscored on the chart should be kept in focus.
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GBP/JPY Daily PRice CHART (Oct 23, 2017– Nov 15, 2019) Zoomed Out
GBP/JPY Daily PRice CHART (May 28 – Nov 15, 2019) Zoomed In
From the daily chart, we notice on Oct 24 GBP/JPY rebounded nearby the low end of current trading zone 140.50 – 139.00. Since then, the price has consolidated creating a bullish pennant pattern suggesting a rally towards 146.94 if the price breaks and remains above the upper line of the pennant.
It’s worth noting that, a close above the high end of the zone could cause a rally towards the vicinity of 143.09-19. Although, the weekly resistance levels marked on the chart (zoomed in) should be watched closely.
On the other hand, if the GBPJPY closes in the other direction i.e. below the low end of the zone, this would negate the pennant pattern and may embolden sellers to press towards the vicinity of 136.40-28. That said, the weekly support levels underscored on the chart would be worth monitoring.
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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.