GBP/JPY, EUR/JPY Charts Highlight Bearish Signals - JPY Price Outlook
EUR /JPY and GBP/JPY Technical Analysis
- EUR/JPY and GBP/JPY price charts highlight bearish signals
- Key levels and price thresholds to consider
GBP/JPY, EURJPY – Bears Slow Down
Last week, EUR/JPY tumbled to 119.77- its lowest level in nearly six weeks.However, the market rallied after as some shorts seemed to cover. On the other hand, GBP/JPY declined to its lowest level in three weeks at 141.26 then closed the weekly candlestick with a marginal gain 0.2%.
The Relative Strength Index (RSI) remained flat below 50 on both pairs highlighting paused bearish momentum.
EUR/JPY Daily PRice CHART (Jun 20, 2018 – FEB 7, 2020) Zoomed Out
EUR/JPY Daily Price CHART (AUg 25 – FEB 7, 2020) Zoomed in
Looking at the daily chart, we notice on Dec 27 EUR/JPY corrected its uptrend move as created a lower high at 122.50. On Jan 23, the market closed below the 50-day average generating a bearish signal.
Last week, the price remained in the same trading zone 120.00 – 121.48 reflecting bear’s hesitation. This led the price this week to rally as some of them seemed to cover. A close below the low end of the zone may terminate bear’s hesitation and send the price towards 118.47. That said the weekly support levels marked on the chart should be watched closely.
In turn, a close above the high end of the zone could lead more bears to exit the market. This might rally GBPJPY towards 122.40. Although, the weekly resistance level underlined on the chart (zoomed in) should be kept in focus.
GBP/JPY Daily PRice CHART (May 20, 2018 – FEb 7, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (Oct 5 – FEb 7, 2020) Zoomed In
From the daily chart, we noticed that on Jan 3 GBP/JPY corrected its uptrend move and carved out a lower low at 141.00 then developed a broadening top pattern. This pattern is usually a bearish pattern.
On Feb 4, the market reverted to a higher trading zone 141.85 – 143.25. On Wednesday the price failed to move to the next higher zone reflecting bears comeback. A close below the low end of the zone could lead more bears to join the market and press GBPJPY towards 139.37. Further close below this level could send the price towards 137.54. Yet, the weekly support levels underlined on the chart (zoomed in) should be considered.
On the flip side, a close above the high end of the zone may lead bears to exit the market. This could push GBPJPY towards 146.94. Further close above this level could open the door for a rally towards 147.95. Nevertheless, 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.