JPY Price Outlook: Will GBP/JPY & EUR/JPY Bears Comeback?
What's on this page
- Euro & British Pound vs Japanese Yen Technical Forecast
- Lack of Momentum
- EUR/JPY Daily PRice CHART (Nov 15 , 2018 – April 15, 2020) Zoomed Out
- EUR/JPY Daily Price CHART (Jan 9 – April15 , 2020) Zoomed in
- GBP/JPY Daily PRice CHART (July 15, 2018 – April 15, 2020) Zoomed Out
- GBP/JPY Daily PRice CHART (FEB 6 – April 15, 2020) Zoomed In
Euro & British Pound vs Japanese Yen Technical Forecast
Lack of Momentum
On April 7, EUR/JPY rallied to 119.03. However, the price fell after and settled below 119.00 handle. Yet, the weekly candlestick closed with 1.1% gain. Meanwhile, on Thursday GBP/JPY rallied to its highest level in four weeks at 135.75, then declined after. Although, the market closed the weekly candlestick with 1.5% gain.
This week, the Relative Strength Index (RSI) remained flat below 50 on EURJPY, highlighting a paused downtrend move. On the other hand, the oscillator remained flat above 50 on GBPJPY , signaling a paused move.
EUR/JPY Daily PRice CHART (Nov 15 , 2018 – April 15, 2020) Zoomed Out
EUR/JPY Daily Price CHART (Jan 9 – April15 , 2020) Zoomed in
Looking at the daily chart, we noticed that on March 9 EUR/JPY rebounded from its lowest level in nearly six months at 116.12. By the end of March, the pair declined to current trading zone 116.45-119.63 then developed a descending triangle. Therefore, any violation to the lower line of this pattern located at 116.30, might send the price towards the vicinity of 111.58-44.
A close below the low end of the zone would be considered as a bearish signal. This could encourage bears to press EURJPY towards 113.22. Further close below that level may send the pair even lower towards 111.14. Nevertheless, the weekly support area and levels marked on the chart (zoomed in) should be watched closely.
On the flip side, any failure in closing below the low end of the zone could reverse the pair’s direction towards the high end of the zone. Further close above that level may cause a rally towards 121.48. Although, the weekly resistance levels underlined on the chart should be considered.
GBP/JPY Daily PRice CHART (July 15, 2018 – April 15, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (FEB 6 – April 15, 2020) Zoomed In
From the daily chart, we noticed that on March 26 GBP/JPY broke above the March 20 high at 132.05, then started uptrend move creating higher highs with higher lows. On April 7, the pair climbed to current trading zone 133.30 – 137.83. Yet, the price U-turned eyeing a test of the low end of the zone.
A close below the low end of the zone increases the likelihood of correcting current uptrend move and would possibly lead GBPJPY towards 128.84. Further close below that level could send the market even lower towards 125.50. That said, the daily and weekly support area and levels underscored on the chart (zoomed in) should be kept in focus.
In turn, any failure in closing below the low end of the zone might reverse the price higher towards the high end of the zone. Further close above that level may extend this rally towards 143.20. In that scenario, the weekly resistance levels printed on the chart should be monitored.
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.