EUR/JPY analysis: bullish above 120.80, deeper correction below it

Valeria Bednarik FXStreet

EUR/JPY Current price: 121.64

The EUR/JPY rallied up to 121.88 on Friday, but closed in the red at 121.10, weighed by the poor US report, which helped the yen to recover some ground. Also, helping the yen were lower bond yields, as the US 10-year Treasury benchmark hit a fresh 17-month high on Thursday of 2.447%, although it ended the week around 2.39%, while the 30-year yield rose to 3.099%, its highest in over a year, to end the week at 3.06%. Nevertheless, the pair has closed the week strongly higher, and the daily chart shows that technical indicators have entered in a consolidative stage within overbought territory, with no signs that the pair may fall further. In the same chart, the 100 DMA has turned higher, but far below the current level and the 200 DMA, this last at 117.12. In the 4 hours chart, technical indicators head sharply lower, having corrected extreme overbought readings but still within positive territory, while the 100 SMA has accelerated its advance far below the current level, now around 118.36. The pair has found buying interest around 120.80 by the end of last week, now the immediate support and the level to break to confirm a deeper correction, towards the 120.00 price zone, the 23.6% retracement of its latest daily bullish run.

Support levels: 120.80 120.40 120.00

Resistance levels: 121.55 121.10 121.60

View Live Chart for the EUR/JPY

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.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.