GBP/JPY, EUR/JPY Tested the Support & Eye The Resistance - JPY Price Forecast
Euro & British Pound vs Japanese Yen Technical Outlook
On Thursday, EUR/JPY declined to its lowest level in three weeks at 116.35 then rallied after as some bears seemed to cover. In the following day, the weekly candlestick closed in the red with 2.5% loss. Meanwhile, GBP/JPY closed in the weekly candlestick on Friday with a Doji pattern highlighting the market’s indecision.
This week, the Relative Strength Index (RSI) rose from 41 to 50 on EURJPY reflecting a weaker downtrend move. On the other hand, the oscillator remained flat on GBPJPY near 50 signaling a lack of impulse to start uptrend move.
EUR/JPY Daily PRice CHART (NOV 15 , 2018 – April 7, 2020) Zoomed Out
EUR/JPY Daily Price CHART (Jan 9 – April7 , 2020) Zoomed in
Looking at the daily chart, we noticed that on April 2 EUR/JPY rebounded near the low end of current trading zone 116.45 – 119.63 then rallied eyeing a test of the 50-day average and the downtrend line originated from the Jan 16 high at 122.87.
A close above the high end of the zone may cause a rally towards 121.48. Further close above that level could extend the rally towards 124.10. Its noteworthy that, any break above the neckline of the double bottom pattern located at 121.15 would be a bullish signal and might lead EURJPY towards 125.82. That said, the daily and weekly resistance level underlined on the chart (zoomed in) should be kept in focus
In turn, any failure in closing above the high end of the zone could reverse the pair’s direction towards the low end of the zone. Further close below that level could encourage bears to send EURJPY even lower towards 113.22 . Yet, the weekly support levels printed on the chart should be monitored.
GBP/JPY Daily PRice CHART (NOV 15, 2018 – April 7, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (JAN 27 – April 7, 2020) Zoomed In
From the daily chart, we noticed that on Friday GBP/JPY declined to current trading zone 128.84 – 133.30. Yesterday, the price rallied yet remained trading in the same zone. Today, the price reattempts moving to a higher trading zone.
Thus, a close above the high end of the zone may convince GBPJPY bulls to push for a test of 137.83. Further close above that level could encourage bulls to rally the market towards 143.20. Although, the weekly resistance levels underscored on the chart (zoomed in) should be watched closely.
On the flip-side, a close below the high end of the zone may send GBPJPY towards the low end of the zone. Further close below that level could entice bears to send the price even lower towards 125.50. In that scenario, the daily and weekly support levels 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.