EUR/JPY Price Analysis: Bears to step in on bulls’ failure at 144.00, as a double top looms
|- The EUR/JPY is printing gains of 1.53% in the week.
- The sentiment is mixed and remains fragile due to the global economic outlook.
- EUR/JPY Price Forecast: Double top in the daily chart looms.
The EUR/JPY begins the Asian session on the wrong foot, recording decent losses of 0.13% as market sentiment deteriorates with Asian equity futures mixed. In contrast, US stocks and DAX futures start to trade in the red. At the time of writing, the EUR/JPY trades around the 143.80 area.
A mixed market mood threatens to increase appetite for safe-haven peers, meaning the Japanese yen has the upper hand. Wall Street’s skepticism that Tuesday’s rally means that equities reached a bottom opens the door for further losses. Fed speaking continued, led by Thomas Barkin, Richmond’s Fed President, who said that the Fed should raise rates as fast as it can without triggering a recession in the US.
EUR/JPY Price Forecast: Technical outlook
Daily chart
From a technical perspective, the EUR/JPY might nearly form a double top in the 143.80-144.20s area. Also, traders need to take notice of the Relative Strength Index (RSI), which, although it remains in bullish territory, illustrates that the EUR/JPY’s last two higher highs were printed on RSI’s lower peaks, suggesting that buyers were booking profits.
4-hour chart
The EUR/JPY illustrates the cross as upward biased, based on pure market structure; nevertheless, unless it breaks above the June 8 daily high at 144.25, that would leave the pair exposed to selling pressure.
1-hour chart
The EUR/JPY depicts a negative divergence between the cross-currency price action and the Relative Strength Index (RSI), which is within an overbought territory. However, the EUR/JPY might snap higher for a re-test of the YTD highs around 144.25. If the EUR/JPY buyers fail to break above 144.01, a fall towards the June 21 daily low at 142.00.
Therefore, the EUR/JPY first support would be 143.46. Once broken, the next support would be 143.00. A breach of the latter would tumble the EUR/JPY towards 142.00.
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