EUR/JPY Price Analysis: Bullish outlook prevails, despite sharp losses
- The daily RSI of the EUR/JPY transitioned from its overbought threshold to near 60.
- In the hourly chart, the RSI reveals intense short-term bearish momentum, with the MACD also depicting increased negative bias.
- Any move below the primary SMAs could alter the bullish trend.
The EUR/JPY pair demonstrates resilience, bouncing back after encountering stern resistance at around the pivotal 165.50 landmark. Having faced a downward momentum of 0.90%, the pair skillfully remains above key Simple Moving Averages (SMAs), underlining the persistent bullish sentiment. Yet, market participants are encouraged to prepare for potential short-term adjustments, as bears are gaining ground.
On the daily chart, the Relative Strength Index (RSI) took a big hit on Monday. Notwithstanding, the current value remains in the positive trend territory, potentially signaling the continuation of buying momentum. The Moving Average Convergence Divergence (MACD) prints decreasing green bars, suggesting that the tide might have turned in favor of the bears.
EUR/JPY daily chart
Turning to the hourly RSI, it is located in the negative territory. This situation highlights possible downward momentum, aligning with the downward trend depicted on the Moving Average Convergence Divergence (MACD) histogram, currently showing rising red bars, denoting strengthened negative momentum.
EUR/JPY hourly chart
Broadening the perspective, the EUR/JPY pair is positioned above the 20-day Simple Moving Average (SMA), having just bounced back strongly after meeting resistance at the crucial 165.50 level. This event furnishes a positive impression of the short-term trend. Additionally, the pair's placement above the 100 and 200-day SMA suggests an overall bullish long-term outlook. However, buyers shouldn’t call it a victory as bears are still around the corner.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
