EUR/JPY - Is bearish MA cross capping the upside?

EUR/JPY upside being capped due to 5-day MA and 100-day MA bearish crossover.
Cross is not impressed by 400 point rally in Dow.

Omkar Godbole FXStreet Contributor

EUR/JPY is mildly bid in Asia but is having a tough time holding on to gains above the 133.59 (100-day moving average).

The daily chart shows a bearish crossover (short-term average cuts long-term average from above) between the 5-day MA and 100-day MA. The bear cross was last seen in March 2017 and was followed by a 600-pip sell-off.

Also, the struggle to see convincing gains above the 100-day MA shows the JPY bears are not impressed by the 400 point rally in the Dow index. However, the EUR/JPY one-month 25 delta risk reversals gauge does show a slight drop in the premium claimed by EUR puts over EUR calls (i.e. slight drop in demand for EUR puts - bearish bets).

Looking ahead, the cross remains at the mercy of the sentiment in the equity markets, given the light Eurozone data calendar.

EUR/JPY Technical Levels

The pair was last seen trading around 133.62 levels. A break below 133.43 (session low) would open up downside towards 132.90 (previous day's low) and 131.98 (Friday's doji candle low). On the other hand, a move above 134.13 (Jan. 30 low) could yield a rally to 134.57 (50-day MA) and 134.77 (10-day MA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Shrinking
1H	Bearish	Neutral	Expanding
4H	Bullish	Neutral	Low
1D	Bearish	Neutral	High
1W	Bearish	Neutral	Expanding
Updated Feb 13, 02:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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