Bearish Continuation in EUR/JPY

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Bearish Continuation in EUR/JPY

Since marking a low on the year around 126.90, EUR/JPY has rebounded to 131.70. However, as we wind down the month price action is starting to revive the prevailing downtrend. Let’s take a look at the chart.

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The 4H chart shows the bullish correction in the second half of March stalling around 131.50-131.70. At the end of last week, price fell below a rising trendline but stalled around 129. Then, after a pullback failed to push above 130.50, price confirmed the breakout by falling below 129 this week.

Note that price has crossed back under the 100-, and 50-period SMAs while the RSI has broken below 40. This shows revival of the bearish bias, and loss of the short-term bullish momentum we saw recently. As we continue into the second half of the week, EUR/JPY looks poised to slide further towards the 126.90 low.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.