EUR/JPY Outlook: Euro vs JPY Price Rebounds from a Well-Defined Level
Euro vs Japanese Yen Technical Outlook
EUR/JPY Price- A Multi-Month High
The latest ECB announcement of increasing the size of emergency bond purchases (PEPP) to 1.35 trillion euros boosted the Euro price against major currencies and led EUR/JPY on Friday to an over thirteen-month high at 124.43.
This week, the Relative Strength Index (RSI) has abandoned the overbought territory indicating that bulls were losing momentum.
EUR/JPY Daily PRice CHART (JULY 1, 2018 – June 9, 2020) Zoomed Out
EUR/JPY Daily Price CHART (March 2 – June 9, 2020) Zoomed in
On May 26, EUR/JPY closed above the 50-day moving average then rallied however, the price failed twice to move to the higher trading zone reflecting bull’s indecision at this stage. Today, the pair has fallen to the low end of the current trading zone 121.48 – 124.10.
A close below the low end of the aforementioned trading zone signals that EURJPY could decline towards 119.63. A further close below that level could send the market even lower towards 114.22.
On the other hand, any failure in closing below the low end of the zone could embolden bulls to re-test the high end of it. Any successful close above that level may cause a rally towards 127.55.
See the daily chart (zoomed in) to know more about the key levels to monitor in both scenarios.
EUR/JPY Four Hour Price CHART (May 1 – June 9, 2020)
On May 27, EUR/JPY broke above the downtrend line originated from the May 21 high at 118.52, and generated a bullish signal. At present, the price trades above the uptrend line originated from the May 15 low at 115.47 yet any violation of this line would produce a bearish signal.
Thus, a break below 121.19 signals a possible fall towards 120.01 in turn, any break in the other direction i.e. above 124.96 may trigger a rally towards the 125.80. Nonetheless, the daily support and resistance marked on the four-hour chart should be kept in focus.
Written By: Mahmoud Alkudsi, Market Analyst
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.