EUR/JPY analysis: bearish, pressuring Fibonacci support

Valeria Bednarik FXStreet

EUR/JPY Current price: 112.83

View Live Chart for the EUR/JPY

The Japanese yen surged at the beginning of the week, driven by a sharp decline in worldwide stocks ever since the day started. BOJ's Governor Kuroda commented over economic policy during the past Asian session, stating that the Central Bank is ready to act as needed to reach their 2% inflation goal, but his comments didn´t help the local currency. The common currency suffered also from comments coming from ECB's Mario Draghi, who said that he expects the current economic recovery to continue, but warned about signals that it has lost some momentum. The EUR/JPY pair fell down to 112.81, paring losses around a major Fibonacci support, the 61.8% retracement of its latest bullish run. The short term picture is bearish, given that the price broke below its 100 SMA at the beginning of the day, and was unable to recover beyond it afterwards, whilst the technical indicators present modest downward slopes within negative territory. In the 4 hours chart, the Momentum indicator presents a strong bearish slope after entering negative territory, while the RSI turned south, standing now around 43, while the 100 SMA accelerates its decline well above the current price, also favoring a bearish extension on a downward acceleration below 112.80.

Support levels: 112.80 112.40 112.00

Resistance levels: 113.35 113.90 114.35

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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