A mildly dovish press conference from Draghi overnight has helped to push EURJPY away from a critical resistance zone around its 200-day SMA. The declines in the euro as a result of last night’s policy meeting at the ECB are only very small, largely because the bank didn’t announce any new policy measures and Draghi didn’t give much away from a policy perspective either, but the technical implications of even this small sell-off in EURJPY could be significant.
EURJPY has been fighting its 200-day SMA since the beginning of last month. Price hasn’t been able to gain any sort of foothold above this key technical indicator. Also, RSI has been unable to break above the all-important 50-60 level. This doesn’t necessarily suggest that the pair is going to head lower form here, but it does highlight a lack of conviction from the bulls.
In the short-term, we are waiting to see if EURJPY can sustain a break of its 50-day SMA. From there we are watching an important pivot zone around 138.50 – a break here could see the pair sink even lower. Above its 200-day SMA, the pair may find some resistance around 139.27 – this month’s high.
Source: FOREX.com
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