EUR/JPY analysis: still at risk of breaking lower

Valeria Bednarik FXStreet

EUR/JPY Current price: 129.03

The EUR/JPY pair closed the week sharply lower, although still trading within the range set early July. Last Friday, the pair plunged to 128.04, its lowest in over a month, but recovered ground to end in the green 100 pips above this last, as US equities and yield pared losses mid US session, with the firsts closing with modest gains and yields off their daily lows. The Japanese yen has been on the rise for most of the past week amid escalating tensions between the US and North Korea fueling demand for safe-haven assets. And while the demand for the JPY receded on Friday, risk of further gains of the Asian currency remain intact. From a technical point of view, the daily chart shows that the pair remains at the lower end of its latest monthly range, still well above bullish 100 and 200 SMAs, and with technical indicators bouncing modestly within negative territory, not enough to confirm a recovery at this point. In the 4 hours chart, the price remains well below its 100 and 200 SMAs that lost upward strength and are slowly grinding lower, whilst technical indicators have bounced from oversold levels to turn flat within neutral territory, reaffirming the case of a new leg lower ahead.

Support levels: 128.80 128.40 128.00

Resistance levels: 129.30 129.65 130.00

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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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