• On Thursday, the EUR/JPY rallied 120-pip above 129.00
  • The market sentiment is upbeat, with global equity futures indices posting gains.
  • Evergrnade’s woes fade, but caution is warranted.

The EUR/JPY bulls take a breather. On Thursday, the pair posted a 120-pip rally, printing a new weekly high at 129.55, recording almost a 1% gain on the day.  Early in the Asian session, the EUR/JPY is trading at 129.50, barely down 0.02%, at the time of writing.

The market mood is upbeat. Major Asian equity futures indices are up, except for the Topix, which is falling 0.07%, while European and US futures are posting gains. The British pound and the euro are the strongest currencies in the FX market, while the US Dollar is the weakest across the board. 

China’s Evergrande worries are fading.  The real-estate company supposedly would pay the interest in the yuan-denominated bond coupon. However, an article in the WSJ raised investors’ concerns about the possibility of a negative to pay the interest in US dollar-denominated debt bonds, leaving international investors adrift.

EUR/JPY Technical Analysis

Daily chart

The EUR/JPY uptrend move was capped by the confluence of the 50 and the 200-day moving average (DMA) around 129.51. A daily close above the latter would support the bullish bias in the EUR/JPY. In case of that outcome, the EUR/JPY bulls will find their first resistance level at the downslope trendline around the 130.00-20 range. The following supply zones would be the September 8 swing high at 130.69, followed by the psychological 131.00.

On the flip side, failure at 129.51 could pave the way for further losses. The first support would be 129.00. A break of the latter could push the cross-currency towards the key demand levels, being July’s 20 low at 128.59, the first hurdle on its way towards 128.00.

The Relative Strength Index is at 51, aiming higher, supporting the bullish bias.

KEY TECHNICAL LEVELS TO WATCH

EUR/JPY

Overview
Today last price 129.52
Today Daily Change -0.02
Today Daily Change % -0.02
Today daily open 129.54
 
Trends
Daily SMA20 129.6
Daily SMA50 129.51
Daily SMA100 130.91
Daily SMA200 129.64
 
Levels
Previous Daily High 129.55
Previous Daily Low 128.31
Previous Weekly High 130.2
Previous Weekly Low 128.61
Previous Monthly High 130.42
Previous Monthly Low 127.93
Daily Fibonacci 38.2% 129.08
Daily Fibonacci 61.8% 128.78
Daily Pivot Point S1 128.71
Daily Pivot Point S2 127.89
Daily Pivot Point S3 127.46
Daily Pivot Point R1 129.96
Daily Pivot Point R2 130.38
Daily Pivot Point R3 131.2

 

 

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