EURJPY Might Have Peaked. Price Might Range 135.00 - 125.00!
EURJPY pushed higher with strong impulse last month after going all the way lower towards 125.000 psychological support and rejecting it. The current impulse was very intense until it tested the resistance that was present at 137.000 area and rejected it. This rejection was accompanied by the monthly candle closing beneath the key psychological resistance at 135.000. At this moment the price remains in a strong uptrend on the weekly charts as evident by the ascending long term weekly channel. Since the price rejected the 137.000 resistance and M candle closed below 135.000 resistance, it could likely mean that the price might reverse and start heading lower gradually.
Fundamentally, the EURO is the weakest major currency at the moment due to the ongoing conflict and the YEN has depreciated considerably against most major currencies due to the bank of japan monetary policy outlook. The bank of Japan might likely intervene in the markets to prevent the YEN sliding further. These two factors would likely mean that the EURJPY might have tested its high at 137.000 and now would be looking to head lower primarily driven by the EURO weakness.
Coming back to the technical part, last month's impulse was so strong that its failing to provide any technical short term outlook for the EURJPY. However at the 125.000 psychological support, we can see that if its breached (Monthly candle closing below 125.000) then the price would likely resume heading lower towards the 122.000 support. This breach in turn would also violate the long term ascending weekly channel. Therefore patience is required while trading EURJPY on weekly and daily time frames.
On the Flip side, if EURJPY were appreciate more, which would be unlikely given the current fundamental state, it faces multiple resistances unless it manages to clear the 140.000 psychological level after which the path to 145.000 is open to be tested.
In conclusion, we can expect a gradual range trading for EURJPY between 135.000 & 125.000 in the coming weeks. If 125.000 is violated based on current technical picture then we can take this pair short towards 122.000.
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Fundamentally, the EURO is the weakest major currency at the moment due to the ongoing conflict and the YEN has depreciated considerably against most major currencies due to the bank of japan monetary policy outlook. The bank of Japan might likely intervene in the markets to prevent the YEN sliding further. These two factors would likely mean that the EURJPY might have tested its high at 137.000 and now would be looking to head lower primarily driven by the EURO weakness.
Coming back to the technical part, last month's impulse was so strong that its failing to provide any technical short term outlook for the EURJPY. However at the 125.000 psychological support, we can see that if its breached (Monthly candle closing below 125.000) then the price would likely resume heading lower towards the 122.000 support. This breach in turn would also violate the long term ascending weekly channel. Therefore patience is required while trading EURJPY on weekly and daily time frames.
On the Flip side, if EURJPY were appreciate more, which would be unlikely given the current fundamental state, it faces multiple resistances unless it manages to clear the 140.000 psychological level after which the path to 145.000 is open to be tested.
In conclusion, we can expect a gradual range trading for EURJPY between 135.000 & 125.000 in the coming weeks. If 125.000 is violated based on current technical picture then we can take this pair short towards 122.000.
Cheers, I hope you find this insight helpful. Please LIKE & FOLLOW for more insight on Major & Minor currency pairs.
