EUR/JPY analysis: modestly bullish, but 121.40 will likely cap
|EUR/JPY Current price: 120.94
The EUR/JPY pair trimmed its Monday's losses and settled at 120.94, flat weekly basis, as the Japanese yen finally gave up, on the back of Yellen's testimony, suggesting that a rate hike can be trigger as soon as next March. US stocks stand pat after three days of continued gains, with the three major indexes trading around their opening levels, but Treasury yields are back in fashion, with the 10-year note benchmark up to 2.49% from previous close at 2.43%. Given that both currencies tend to move in tandem on dollar's strength, chances of a sharp directional move are limited, although the JPY may depreciate at a faster pace than the EUR during the upcoming Asian session. From a technical point of the view, and according to the 4 hours chart, the pair presents a modest upward potential, as technical indicators entered positive territory, although they are now losing their upward strength, whilst the 100 SMA extend its decline further, now a couple of pips below a Fibonacci resistance at 121.40. This last has provided support for over two months until the pair finally broke lower, acting ever since as resistance. Odds of a break above it, are therefore limited.
Support levels: 120.55 120.10 119.60
Resistance levels: 121.05 121.40 121.85
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