The daily chart of EUR/JPY suggests that the pair formed a decent support recently and corrected higher. However, it is now approaching significant resistance at 130.60, above which there could be more gains.

Key Points

The Euro found support near the 124.90-125.00 zone and recovered nicely against the Japanese Yen.
The EUR/JPY pair is now approaching a crucial bearish trend line with resistance at 130.50 on the daily chart.

EUR/JPY Technical Analysis

The Euro declined sharply from the 131.00 swing high during the first week of August 2018 against the Japanese Yen. The EUR/JPY pair dropped heavily and broke the 129.00, 128.00 and 126.00 support levels.

The decline was such that the pair also cleared the 125.00 support and settled well below the 50-day simple moving average. A new monthly low was formed at 124.90 where buyers emerged.

There was a strong bullish reaction from the 124.90-125.00 support area and it seems like the pair formed a double bottom pattern on the daily chart. It climbed higher sharply and broke the 128.00 resistance zone.

There was even a break above the 61.8% Fib retracement level of the last decline from the 131.99 high to 124.90 low. The pair settled above the 129.00 level and the 50-day SMA.

However, there is a significant resistance waiting near the 130.50 level and a bearish trend line with resistance on the same chart. Moreover, the 76.4% Fib retracement level of the last decline from the 131.99 high to 124.90 low is placed near 130.32.

If EUR/JPY manages to break the 130.50 resistance and the bearish trend line, it could test the 131.10/90 pivot zone. Should there be a close above 132.00, the pair may possibly surge towards the 134.00 and 135.00 levels.

On the flip side, a failure to clear the 130.50 and 131.10 resistances might ignite a fresh downside move. Supports on the downside are 129.00, 50-day SMA, 128.50 and 127.00.

The market outlook is provided by FXOpen broker.

FXOpen - true ECN/STP Forex and cryptocurrency broker.

© 2018 Copyright FXOpen - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.