GBP/JPY, EUR/JPY May Rally Further as Support Holds - JPY Price Outlook
EUR /JPY & GBP/JPY Technical Forecast
Bears in Charge
On Wednesday, EUR/JPY tumbled to 116.90 then rallied after as bears seemed to cover. Yet, the weekly candlestick closed in the red with 1.0 % loss. On the other hand, GBP/JPY tumbled to 124.03-its lowest level in nearly three and half years. Later on, the price surged and settled above 129.00 handle, closing the weekly candlestick with 2.6% loss.
Alongside that, the Relative Strength Index (RSI) remained flat below 50 on EURJPY highlighting a weak downtrend move. The oscillator remained in oversold territory on GBPJPY emphasizing the bearish outlook of the market.
EUR/JPY Daily PRice CHART (Oct 30 , 2018 – Mar 24, 2020) Zoomed Out
EUR/JPY Daily Price CHART (Jan 12 – Mar 24, 2020) Zoomed in
Looking at the daily chart, we noticed that on Friday EUR/JPY rallied then closed above the 50-day average providing a bullish signal. Today, the price has moved to the higher trading zone 119.63 – 121.48. Additionally, the pair tested the downtrend line originated from the Jan 15 high at 122.87.
A close above the low end of the zone could entice EURJPY to rally towards the high end of the zone. Further close above that levels may convince bulls to push towards 124.10. In that scenario, the weekly resistance levels underscored on the chart (zoomed in) should be watched closely.
In turn, any failure in closing above the low end of the zone may send EURJPY towards 116.45. Further close below that level could send the price even lower towards 113.22. Nevertheless, the weekly support levels printed on the chart should be monitored.
GBP/JPY Daily PRice CHART (Sep 20, 2018 – Mar 24, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (Jan 12 – Mar 24, 2020) Zoomed In
From the daily chart, we noticed that in late February GBP/JPY started a downtrend move creating lower highs with lower lows. The price rebounded around 124.00 handle then rallied as bears seemed to ease up. Today, the pair has moved to higher trading zone 128.84 – 133.30.
Thus, any close above the low end of the zone could lead GBPJPY towards the high end of the zone. Further close above that level opens the door for the market to raise towards 137.83. Although, the weekly resistance level underlined on the chart (zoomed in) should be kept in focus.
On the flip-side, any failure in closing above the low end may encourage bears to press GBPJPY towards 125.50. Further close below that level could mean more bearishness towards 122.62. That said, the weekly support level marked on the chart should be considered.
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.