Dukascopy

EUR/JPY limited from both sides

FX:EURJPY   Euro / Japanese Yen
The common European currency was dominated by upside risks on Tuesday in the result of which it surged up to the bottom boundary of the previously-breached ascending channel near 132.80. This area—likewise reinforced by the combined resistance of the weekly and monthly PPs—proved to be a stopping point for the pair.

Thus, it was stranded in a narrow range between the aforementioned pivot points and the 100-hour SMA by mid-Wednesday. Both levels provide a strong barrier; however, it is more likely that the pair surrenders under the pressure of its resistance and thus trades lower.

The downside limit could either the 55-hour SMA or its seven-week low at 132.10 and 131.55, respectively.
Comment:

The movement of the European common currency during the past session has been guided by the 200-hour SMA, as the pair was unable to move away from the given moving average.

Its seems that the Euro might have set the upper channel boundary as an immediate target. However, given the fact that the line has not yet been confirmed, this assumption might be misleading.

Meanwhile, the Euro faces a significant support cluster formed by the monthly and weekly PPs and the 55-hour SMA circa 132.75. Thus, the narrow range in which the pair was trading mid-Friday is expected to surrender within the upcoming hours.

The base scenario favours the rate pushing for the aforementioned channel boundary in the 133.10 territory.
Comment:

EUR/JPY was stranded between the 100– and 200-hour SMAs on Friday. The latter restricted the pair from overcoming the 133.15 mark. The rate has since returned near this level, but the prevalence of the bearish sentiment in this session has sent it for a fall down to 132.20.

The pair breaching the combined support of the monthly PP, the 55-, 100– and 200-hour SMAs circa 132.80 suggests that the given sentiment might prevail during the upcoming 24 hours, as well.

The nearest resistance is formed by all above SMAs, while support is set by the weekly S1 and the eight-week low at 131.50 and 131.56, respectively.

This scenario goes in line with the Euro bouncing off the upper channel boundary early on Monday. The scope of the fall, however, should not be as steep as this pattern itself.
Comment: After the Euro encountered the medium term descending channel’s upper trend line against the Japanese Yen, the currency exchange rate began a decline. The decline soon revealed that it has a the form of a falling wedge pattern.

By the middle of Tuesday’s London trading session it was clear that the par is set to fall down to the 131.56 level, where the closest notable support was located at. The support was represented by the weekly S1.

In addition, it was strengthened by the historically important 131.51 mark.
Comment:

After testing the weekly PP at 132.40 early on Tuesday, the common European currency edged slightly lower, but nevertheless remained stable against the Yen.

This session started with the rate testing the psychological 132.00 mark for several hours. This level, however, held strong, especially given the massive resistance cluster nearby formed by the 55-, 200– and 100-hour SMAs, the 38.2% Fibo and the weekly PP in the 132.10/50 territory.

Is it likely that this cluster pressures the rate south past the weekly S1 and the two-month low of 131.56. This fall, however, should not be long-lasting, as technical oscillators would soon break out from the oversold area.

Subsequently, the rate might re-test the aforementioned resistance, but, given its strength, remain near 132.00
Comment:

The Euro has been fluctuating around the 132.00 mark for the third consecutive session. During this time, the pair has been likewise stranded between the 100– and 200-hour SMAs and the two-month low of 131.55.

Even though technical indicators flash strongly bearish signals, it is likely that the 132.20 area, reinforced by the aforementioned SMAs and the weekly PP, is re-tested once again.

Given the strength of this resistance cluster, the rate might be hindered and thus continue its consolidation period for several hours, maybe even until the end of this trading week.

In general, the senior descending channel should be breached within the upcoming three or four trading sessions and a surge should consequently follow.
Comment:

The common European currency was stranded between the 100-hour SMA and the weekly S1 on Thursday. Subsequently, the rate tested the former for several hours and eventually breached its resistance.

The Euro, however, failed to accelerate and thus remained in the 130.00/20 territory during Friday’s morning session.

In general, the pair has reached the upper boundary of a descending channel. This suggests a soon breakout. However, given the strong barriers on both sides, rather strong push is needed to move past any of these lines.

The steepness of the channel suggests that a breakout might occur to the upside. This increase in price, however, is unlikely to be steep during Monday, thus setting the monthly PP at 132.76 as the upside target.
Comment:

EUR/JPY breached a medium-term descending channel on Friday and was set for a further movement north. However, the rate halted at 132.60 near the 38.2% Fibo retracement and subsequently plunged back down to the 100-hour SMA circa the psychological 132.00 level.

Despite the bearish momentum on Monday morning, it is likely that the Euro tries to recover some lost positions. However, the 200-hour SMA and the weekly PP at 132.33 could work as an effective resistance and thus mark a turning point for the pair. A possible trading range could be between the aforementioned resistance and the weekly S1 at 131.48.

Meanwhile, the ECB President Draghi is set to participate in a panel discussion together with the BOJ Governor Kuroda the Fed Chief Yellen tomorrow at 1000GMT.
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