EUR/JPY analysis: technical readings support a new leg south

Valeria Bednarik FXStreet

EUR/JPY Current price: 113.36

The Japanese yen weakened this Monday, undermined by a general positive tone around worldwide stocks, and speculation that the Bank of Japan will maintain its current economic policy unchanged at its upcoming November 1st meeting. The EUR/JPY pair edged modestly higher in a dull trading Monday, extending up to 113.58 before settling at 113.35 by the end of the US session. The moderate recovery seems so far corrective, given that, in the 1 hour chart, the price failed to advance beyond a strongly bearish 100 SMA, indicating that the pair may return to its recent lows during the upcoming session. Also, and in the mentioned time frame, technical indicator are retreating from overbought readings, supporting an upcoming leg lower. In the 4 hours chart, technical indicators have turned flat within bearish territory, whilst the intraday recovery stalled well below the 100 and 200 SMAs, all of which maintains the risk towards the downside.

Support levels: 113.05 112.60 112.05

Resistance levels: 113.65 114.00 114.40

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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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