EUR/JPY Price Analysis: Bulls fight to hold the 20-day SMA, bears steady
- The daily RSI records a balanced reading at 50, while the MACD bears a bearish crossover.
- The pair stabilize near the 20-day SMA, with buyers trying to avoid losses beneath it.
- The underlying bullish trend remains intact, guarded by the 100- and 200-day SMAs.
In Friday's session, the EUR/JPY pair is seen consolidating after a significant upward wave which took it near multi-year highs around 171.00, oscillating around the crucial 169.00 level. The stabilization at this junction is particularly corroborated by the proximity to the 20-day Simple Moving Average (SMA) near 169.60 which despite falling beneath, the cross will try to defend it as it serves as a strong support.
The Relative Strength Index (RSI) on the daily chart reads a steady 53 now, reflecting balanced market sentiment between the buyers and the sellers. This neutral RSI implies that the market participants are currently eagle-eyeing further direction before making a move. The daily Moving Average Convergence Divergence (MACD) has recently registered a bearish crossover- an occurrence when the MACD line dived under the signal line. This crossover potentially signals ensuing short-term bearish pressure, opening up possibilities of a tempo correction or further consolidation before resuming the upward march.
EUR/JPY daily chart
However, the broader bullish trend in the EUR/JPY remains unaffected. The support formed by the 100- and 200-day Simple Moving Averages (SMAs) at around 164.00 and 161.00, respectively, form a major bastion against long-drawn bearish movements. Therefore, while recent sessions brought some hope to bear, these movements should be treated as corrective rather than any structural changes in the trend.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
