EUR/JPY outlook: Falls to new multi-week low after break of key support

Slobodan Drvenica Windsor Brokers

EUR/JPY

EURJPY extends steep fall into fifth straight day and hit 11-week low in early Thursday (down 1% in Asian session).

Recent interventions by Japan’s authorities boosted yen across the board and fresh strength gained strong momentum, suggesting that the currency could rise further.

Wednesday’s close below pivotal support at 166.91 (daily cloud base / Fibo 38.2% of 153.14/175.42 rally) generated strong bearish signal, which showed immediate result in fresh acceleration lower on Thursday.

Bears eye targets at 164.28 (50% retracement) and 163.91 (200 DMA) violation of which to unmask 161.65 (61.8% retracement) and psychological 160 in extension.

Meanwhile, bears may take a breather for consolidation, as daily studies are strongly oversold.

Upticks should be capped under broken pivot at 166.91, now acting as solid resistance, to keep bears in play and mark positioning for fresh push lower.

Markets shift focus towards next week’s BoJ monetary policy meeting (Wednesday) especially on the latest talks encouraging further rate hikes, which would provide fresh support to rising yen.

Res: 166.91; 167.78; 168.87; 169.01.
Sup: 164.28; 163.91; 163.01; 161.65.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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