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EUR/USD, EUR/JPY Outlook: Price May Change its Current Direction

EUR/USD, EUR/JPY Outlook: Price May Change its Current Direction

2019-09-30 09:38:00
Mahmoud Alkudsi, Market Analyst
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EUR/USD and EUR/JPY Technical Forecast

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EUR/JPY, EUR/USD – Bearish Move Last Week

On Sep 18 , EUR/USD was hammered at resistance then declined to the levels discussed in our last update at 1.0912. The pair closed the weekly candlestick with a 0.7% loss. Similarly, Euro lost value against Japanese Yen last week. However, closed on Friday with only 0.3% loss.

The Relative Strength Index (RSI) failed twice this month to cross above 50 highlighting the downtrend momentum on EUR/USD was still intact. On the other hand, the oscillator dipped below 50 on Sep 19 ending the uptrend move on EUR/JPY.

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EUR/USD Daily PRice CHART (June 23, 2017 - SEp 30, 2019) Zoomed Out

EURUSD daily price chart 30-09-19.PNG zoomed out

EUR/USD Daily Price CHART (June19 – Sep 30, 2019) Zoomed in

EURUSD daily price chart 30-09-19.PNG zoomed in

Looking at the daily chart we notice, since Sep 20 EUR/USD has been declining towards the low end of current trading zone 1.0912- 1.1050. At the end of the last week, the price rebounded twice nearby the low end of the zone, reflecting seller’s hesitation to keep pressing the price lower.

Thus, the price may be on its way for a test of the high end of the zone, contingent on clearing the daily resistance levels underlined on the chart (zoomed in). Further close above 1.1060 could push EURUSD towards the vicinity of 1.1215-20. Although, the weekly resistance levels should be considered.

Its worth mentioning that on Sep 3, the price created a low then a lower low on Sep 27 meanwhile on RSI we notice a formation of low with a higher low. This indicates to a positive divergence, and a possible reverse in the price’s direction to the upside.

That said, any successful close below the low end of the zone may press EURUSD towards 1.0812. In that scenario, the weekly support levels marked on the chart need to be watched closely.

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EUR/JPY Daily PRice CHART (Jan 2, 2017– Sep 30, 2019) Zoomed Out

EURJPY price daily chart 30-09-19 Zoomed out

EUR/JPY Daily PRice CHART (June 10 – SEp 30, 2019) Zoomed In

EURJPY price daily chart 30-09-19 Zoomed in

From the daily chart, we notice on Sep 18 EUR/JPY rebounded from the high end of current trading zone 117.30 – 119.78 then declined for a test of the low end of the zone.

Hence, a close below the low end of the zone could send EURJPY towards the vicinity of 114.95-80. Although, the weekly support levels underlined on the chart (zoomed in) should be kept in focus.

Its worth noting that, on Sep 20 EURJPY broke below the uptrend line originated form the Sep 3 low at 115.86. This suggests that the pair could be eyeing a break below the low end of the zone and looking for a test of the vicinity of 116.55-45 as explained on the chart.

On the other hand, any failure in closing below the low end could reverse the pair’s direction, sending the price towards the high end of the zone. Further close above the high end could see EURJPY trading towards 121.25. That said, the weekly resistance levels underscored 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.

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