EUR/JPY analysis: bearish momentum to accelerate below 119.70

Valeria Bednarik FXStreet

EUR/JPY Current price: 119.91

The Japanese yen was the most benefited in the run to safety seen over the past 48 hours, resulting in the EUR/JPY plummeting to 119.74, its lowest since early March. The BOJ released the Minutes of its latest meeting during the past Asian session, maintaining their view and adding nothing new that could affect financial markets. Policymakers are still expecting inflation and growth to accelerate in the near future, although the economic expansion will be "moderate." Asian and European equities closing in the red, helped the yen to advance. The pair has reached a major Fibonacci support, as the decline stalled a couple of pips short of the 38.2% retracement of the late 2016 rally at 119.70, now the immediate support. Intraday technical readings support additional declines, as in the 1 hour chart, technical indicators have resumed their declines within negative territory after correcting oversold conditions, whilst the 100 and 200 SMAs gain bearish strength well above the current level. In the 4 hours chart, the pair has broken below its 100 and 200 SMAs, with the shortest maintaining its bullish slope, whilst technical indicators have partially lost their bearish strength within oversold readings, but remain far from suggesting downward exhaustion, indicating that a new leg lower is more than likely on a break below 119.70, towards 118.20, February lows.

Support levels: 119.70 119.20 118.80

Resistance levels: 120.30 120.85 121.40

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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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