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Technical Analysis – EUR/JPY possibly oversold

EUR/JPY 24/05/2018 | EconAlerts


EUR/JPY hits fresh 9-month low; possibly oversold.

EUR/JPY has declined considerably after posting a three-and-a-half-month high of 133.48 on April 24; it is currently trading 3.6% below that peak. Earlier on Thursday, it touched a fresh nine-month low of 127.96, after losing roughly 190 pips on Wednesday.

The Tenkan-Sen line remains below the Kijun-Sen in support of a negative short-term picture for the pair. The Chikou Span, though, may be pointing to an oversold market; a near-term reversal should not be ruled out.

Support to further declines could come around the 128 and 127 round figures that may hold psychological significance; the 128 handle was momentarily violated earlier on Thursday before the price bouncing back above it.

On the upside, resistance may be met around the 129 handle. Notice that a couple of bottoms from the recent past at 129.34 and 128.94 also lie close to this level. Further above, the region around the current level of the Tenkan-Sen at 129.66 could also act as a barrier to price gains.

The medium-term picture is looking predominantly bearish at the moment: price action is taking place below the 50- and 100-day moving average lines, as well as below the Ichimoku cloud. Moreover, a bearish cross was recorded around mid-March when the 50-day MA moved below the 100-day one.

Overall, both the short- and medium-term outlooks are looking negative, though there are some signs hinting to a potentially oversold market in the near-term.

EUR/JPY 24/05/2018 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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