EUR/JPY analysis: bearish momentum below 112.85

Valeria Bednarik FXStreet

EUR/JPY Current price: 113.44

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The EUR/JPY pair fell for a third consecutive week, extending its decline down to 112.06 as the Bank of Japan decided to leave its economic policy unchanged, fueling yen's demand. The pair however, managed to trim most of its weekly losses, closing at 113.44, as the yen shed some ground after testing the critical ¥100.00 against the greenback. According to the daily chart, the risk for the pair remains towards the downside, given that in the daily chart, the price is still well below a strongly bearish 100 DMA while technical indicators' recovery stalled below their mid-lines. The price has broken temporarily below 112.85, the 61.8% retracement of its latest daily recovery, now the immediate support. In the 4 hours chart, the Momentum indicator maintains a strong bullish slope within positive territory, but considering that the price retreated from its highs and remains well below its moving averages, and that the RSI indicator turned lower around 51, the upward potential seems limited, mostly if the pair is unable to recover firmly above 113.90, the 50% retracement of the mentioned rally.

Support levels: 112.85 112.40 112.00

Resistance levels: 113.90 114.35 114.80

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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