EUR/JPY Price Analysis: A pullback on the cards, as negative divergence and a rising-wedge lurks
- The EUR/JPY remains intact, but the divergence between price action/RSI might open the door for a pullback.
- Also, the EUR/JPY daily chart shows price action meandering within a rising wedge, which suggests the Euro might weaken vs. the Japanes Yen.
The EUR/JPY extends to two-day of losses amidst a risk-off impulse as witnessed by Wall Street’s finishing with losses. Meanwhile, as the Asian Pacific session begins, the EUR/JPY is trading at 146.42, registering minuscule gains of 0.04%.
EUR/JPY Price Analysis: Technical outlook
While the EUR/JPY retreated from weekly highs around 147.75, as shown by the daily chart, the uptrend remains intact – for now. However, the emergence of a rising wedge, lays the ground for a pullback, at least to the 20-day Exponential Moving Average (EMA) at 145.21, ahead of critical support reached on October 24, following the Bank of Japan (BoJ) FX intervention at 143.72, shy of the 144.00 figure.
The Relative Strength Index (RSI) has reached a successive series of lower highs, contrarily to price action. So two technical indicators namely the rising wedge and divergence between the EUR/JPY price action and RSI, suggest that sellers are gathering momentum.
EUR/JPY Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
