EURJPY appears to be having trouble sustaining its forex market climb past the 141.00 handle, indicating that a market correction is due. In this case, price could retrace until the 139.00 major psychological level, which has served as a former resistance area.
A lower pullback could lead to a test of the 138.00 major psychological support, which also coincides with a broken resistance area. This is closer to the 100 and 200 simple moving averages, which might act as dynamic support for forex market price action.
MACD is moving down, reflecting the presence of selling pressure. Stochastic just recently made it out of the oversold zone but is starting to head back down, suggesting that euro bears could still push forex market prices a little lower.
Forex Market Forecast
An upside break from the pair’s current consolidation could mean that buyers are ready to charge once more, which could then take EURJPY to its previous highs near the 141.00 major psychological level or higher. A break past the previous highs could lead to a test of 142.00 or perhaps a longer-term rally until the 145.00 major psychological resistance.
Fundamentals favor a weaker euro though, as several ECB officials have noted that further easing is possible. Euro zone PMI figures have mostly surprised to the downside recently, reflecting potentially weaker growth for the region.
However, economic data from Japan has also mostly been disappointing, with many clamoring for further easing from the BOJ as well. For now though, central bank officials refuse to admit that stimulus is needed and the risk-off forex market environment is currently favoring the Japanese yen, as the geopolitical tension from the US airstrikes in Syria could continue to sentiment.
With that, EURJPY could have a shot at selling off from its current forex market levels, possibly until the nearby support zones until sentiment improves considerably.
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