EUR/JPY is giving us a bearish continuation signal in the 4H chart. It held under 139 and the 200 SMA this week, and today’s price action brought the pair to a new low on the week and below a rising support from last week. Today’s bearish price action dominates relative to the soft bullish attempts in this past 2 weeks, giving us a bearish signal.
(eurjpy 4h chart, 6/26)
As the 4H RSI dips below 30 and as price nears the 137.70-137.75 lows, we can expect some near-term bullish pullback. However, look for traders to fade the pair if EUR/JPY pulls up toward the 138.25-138.50 area. A bearish market should hold this area as resistance. Looking at the daily chart, you can also see price now trading under the 200-day moving average.
This week provided a test of the 200SMA as resistance and today’s price action confirmed it as such. Price also respected a falling speedline from the May highs which were just above 142. Today’s technical signal in EUR/JPY puts the focus now on the next key support which is the 2014-lo at 136.23.
(eurjpy daily chart, 6/26)
Today’s bearish signal also establishes 139 to be a key resistance. At this point, a break above this level will be needed to introduce any bullish outlook.
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