EUR/JPY analysis: challenging December 2016 high

Valeria Bednarik FXStreet

EUR/JPY Current price: 123.90

The EUR/JPY pair closed at its highest since mid December 2016, as demand for the common currency coupled with a weaker JPY. Hopes that the Trump administration would boost growth and inflation late last year, sent the pair up to 124.09, with the pair stalling a couple of pips below it last Friday. The Japanese yen edged lower on Friday, as a strong US employment report fueled stocks markets, while hopes that Macron will win French elections further weighed on the safe-haven currency and boosted demand for the common currency. The pair has advanced for a third consecutive week adding roughly 1,000 pips in that period, which resulted in daily indicators reaching extreme overbought territory. Nevertheless, none suggests upward exhaustion at the time being, and a break through the mentioned December high may result in additional gains at the beginning of the week. In the 4 hours chart, technical indicators have turned horizontal, the Momentum within positive territory and the RSI around overbought levels, whilst the 100 SMA crossed above the 200 SMA far below the current level, maintaining the risk towards the upside, despite the lack of upward momentum.

Support levels: 123.65 123.10 122.60

Resistance levels: 124.10 124.50 124.95

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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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