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.

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