EUR/JPY analysis: persisting yen strength points to 118.40

Valeria Bednarik FXStreet

EUR/JPY Current price: 119.73

The EUR/JPY pair plummeted on Friday, as despite dollar's positive tone and Wall Street closing at record highs, US Treasury yields extended their retreat. The 10-year note benchmark closed the week at 2.42% after reaching a peak of 2.52% on Wednesday, following Yellen's semiannual testimony. The pair has closed below its 100 DMA for the first time since early November 2016, and a few pips below a major Fibonacci level, the 38.2% retracement of the October/December rally at 119.70, while in the daily chart, technical indicators have failed to surpass their mid-lines, and turned sharply lower, all of which favors additional declines ahead, moreover on a break below February low at 119.32, the immediate support. In the 4 hours chart, technical readings also indicate that the risk is towards the downside, as indicators maintain sharp bearish slopes near oversold readings, whilst the price was contained by a bearish 100 DMA for most of the week, with bulls finally giving up on Friday. A break below the mentioned monthly low will favor a downward extension towards the 118.40 region, the 50% retracement of the mentioned rally.

Support levels: 119.30 118.85 118.40

Resistance levels: 120.00 120.45 120.90

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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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