GBP/JPY & EUR/JPY Bears Face Key Support Levels - JPY Price Outlook
EUR /JPY & GBP/JPY Technical Outlook
Bears in Charge
On Friday, EUR/JPY declined to 118.38- its lowest level in over four months. The price rallied after as some bears seemed to cover. Yet, the weekly candlestick closed in the red with 1.5% loss. Similarly, GBP/JPY dipped to multi-month low at 137.15 then closed the weekly candlestick with 4.1% loss.
Alongside that, the Relative Strength Index (RSI) crossed below 50 on EURJPY signalling a possible start of downtrend move. On the other hand, the oscillator dropped from 46 to 30 on GBPJPY indicating that downtrend move were gaining momentum.
EUR/JPY Daily PRice CHART (JUn 21, 2018 – Mar 3, 2020) Zoomed Out
EUR/JPY Daily Price CHART (Oct 15 – Mar 3, 2020) Zoomed in
Looking at the daily chart, we notice that last month the price failed in multiple occasions to rally to the high end of current trading zone 120.00 – 121.48. This allowed bears to press towards 118.47 twice.
On Monday, EUR/JPY opened with a gap to the downside. Yet, the price rallied after to the aforementioned trading zone. Thus, a close below the low end of the zone could mean more bearishness towards 117.09. Nevertheless, the weekly support levels underlined 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 lead bears to exit the market and cause a rally towards the high end of the zone. Further close above that level might send EURJPY even higher towards 122.40. Although, the weekly resistance level printed on the chart would be worth monitoring.
GBP/JPY Daily PRice CHART (Feb 20, 2018 – Mar 3, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (Oct 5 – Mar 3, 2020) Zoomed In
From the daily chart, we noticed that on Wednesday GBP/JPY declined then closed below the 50-day average generating a bearish signal. On Friday, the price rebounded from the low end of current trading zone 137.54 – 139.37.
Yesterday, the pair failed to move to the lower trading zone highlighting bear’s hesitation. This could lead some of them to pull out the market allowing the price to rally towards the high end of the aforementioned trading zone. Further close above that level, could lead GBPJPY to push towards 141.85. Although, the daily resistance level marked on the chart (zoomed in) should be considered.
That said, any close below the low end of the zone opens the door for more bearishness towards 133.31. Further close below this level, might encourage bears to press towards 129.63. Special attention should be paid to the weekly support levels underscored on the chart, as some traders may exit/join the market around these points.
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.