EUR/JPY analysis: fresh year low, and at risk of falling further

Valeria Bednarik FXStreet

EUR/JPY Current price: 117.95

The EUR/JPY pair plummeted to a fresh 2017 low of 117.42 this Tuesday, with the yen backed by the ongoing risk-averse environment, and an intraday in equities and yields, albeit comments from US President Trump, who said that his administration is working on big changes to Dodd-Frank banking regulations that will make it easier for banks to loan money. The US 10-year note threshold stands unchanged for the day at 2.35%. The pair recovered up to 118.18, but is struggling around the 118.00 level ahead of the Asian opening, in what seems more an upward correction than a bottom. The technical picture indicates that the pair can fall further, given that it has broken below a major static Fibonacci level, the 50% retracement of the late 2016 monthly rally at 118.40, now the immediate support. In the 4 hours chart, the 100 SMA turned south, now converging with the 200 SMA around 120.00, while technical indicators have bounced modestly from oversold territory, with the RSI indicator particularly losing upward strength around 34. Furthermore, the pair has settled below its 200 DMA for the first time since mid November. The next big bearish target stands at 116.97, the 61.8% retracement of the mentioned advance.

Support levels: 117.40 116.95 116.60

Resistance levels: 118.40 118.80 119.10

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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