Friday, May 24, 2019
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Technical Analysis – EUR/JPY gains expected to reach downtrend line

EUR/JPY reversed higher after it tumbled towards a fresh four-month low of 122.07 this week. The technical picture supports that the slightly bullish correction is likely to continue in the short-term. The MACD is stretching to the upside above its trigger line and the stochastic oscillator is approaching the overbought zone in the 4-hour chart.

Another move to the upside could find resistance at the 40-simple moving average (SMA) currently at 123.00 and the 123.10 resistance. Marginally higher, the 23.6% Fibonacci retracement level of the down leg from 126.80 to 122.07 of 123.20 is coming into focus ahead of the short-term downtrend line near the 123.60 level.

In case of negative pressures, the market could meet support at the 122.07 level while a successful close below this level could see a retest of the 118.57 level, reached on December 2018.

In brief, EUR/JPY has been in a downward movement over the last three month and bears should be waiting for a decline below the 4-month bottom for further selling interest.


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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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