USD/JPY & EUR/JPY Forecast: Possible Price Fall on The Horizon- This is Why
EUR /JPY and USD/JPY Technical Analysis
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USDJPY, EURJPY – Bullish Development
Last week, EUR/JPY buyers continued bullish price action. On Friday the pair closed with a 1.1% gain. Meanwhile USD/JPY could not maintain the gains and closed the weekly candlestick with a marginal loss 0.04%.
Alongside this, the Relative Strength Index (RSI) remained above 50 on both pairs indicating to buyer’s dominance.
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EUR/JPY Daily PRice CHART (Sep 20, 2018 – Oct 24, 2019) Zoomed Out
EUR/JPY Daily Price CHART (AUG 1 – Oct 24, 2019) Zoomed in
Looking at the daily chart, we notice On Sep 3 EUR/JPY ended its downtrend move then corrected higher a month after creating a higher low at 117.07. On Oct 10, the price closed above 50-day average generating a clear bullish signal, then in mid -Oct uptrend move started and led the pair to its highest level in over three months.
However, uptrend bias paused this week after failing in multiple occasions in moving to a higher trading zone. Consequently, the price remained in current trading zone 119.78 – 121.25. Thus, EURJPY could be on the way towards the low end of the zone. Further close below the low end may open the door for more bearishness towards 117.30. Although, the daily and weekly support levels underlined on the chart (zoomed in) should be kept in focus.
That said, any close above the high end of the zone could resume bullish price action towards 122.52. Further close above this level could push EURJPY towards 124.40. Nevertheless, the weekly resistance area and levels marked on the chart should be watched along the way.
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USD/JPY Daily PRice CHART (June 1, 2017– Oct 24, 2019) Zoomed Out
USD/JPY Daily PRice CHART (June 6 – Oct 24, 2019) Zoomed In
From the daily chart, we notice on Oct 3 USD/JPY stopped its downtrend move. On Oct 7 the price closed above 50-day average changing its course to the upside then printing 108.93 -its highest level in over six weeks.
Today, USDJPY moves in a lower trading zone 107.30 – 108.61. a close below the high end of the zone could lead the pair towards the low end. Its worth noting the bearish divergence existing between (RSI) and the price signaling a coming reversal in the current uptrend.
On the flip-side, a close above the high end of the zone could push USDJPY towards the vicinity of 109.75-84. Although, the weekly resistance level underscored at the chart ( the Aug 1 high) should be watched closely.
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.