• EUR/JPY daily chart forms a bearish-engulfing candle pattern with bearish implications.
  • In the short-term, the EUR/JPY might print a leg-up before extending the downtrend.

The EUR/JPY plunged on Wednesday due to a risk-on impulse spurred by US inflation data, which ticked lower, dissipating the Federal Reserve’s need for an aggressive tightening. The reaction was that the US 10-year bond yield retraced, dragging the USD/JPY. Hence, the EUR/JPY followed suit, diving more than 100 pips towards its daily low at 136.94. At the time of writing, the EUR/JPY is trading at 136.86, down 0.81%.

EUR/JPY Price Analysis: Technical outlook

From a daily chart perspective, the EUR/JPY is forming a bearish-engulfing candle pattern, meaning that sellers outweighed buyers. Additionally, the cross-currency tumbled below the 100-day EMA at 138.03 and, at the time of writing, is testing the August 4 high at 136.92, previous resistance-turned-support. If the latter is broken, that will keep sellers in the driver’s seat, paving the way for further losses.

EUR/JPY Daily chart

Short-term, the EUR/JPY hourly chart, illustrates the pair as neutral-upwards, but prices falling below the weekly opening price of 137.32, might pave the way for further losses. The downtrend seems to lose steam as the Relative Strength Index (RSI) entered oversold conditions, which means that the EUR/JPY might print a leg-up towards the 50% Fibonacci retracement at 137.50 before resuming the downtrend.

If the above scenario plays out, the EUR/JPY first support would be the 137.00 figure. Once cleared, the next support level will be the August 10 low at 136.61, followed by the 200-hour EMA at 136.44, before sliding to the psychological 136.00 figure.

EUR/JPY Hourly chart

EUR/JPY Key Technical Levels

EUR/JPY

Overview
Today last price 136.89
Today Daily Change -1.00
Today Daily Change % -0.73
Today daily open 137.89
 
Trends
Daily SMA20 138.23
Daily SMA50 139.89
Daily SMA100 138.04
Daily SMA200 133.85
 
Levels
Previous Daily High 138.32
Previous Daily Low 137.26
Previous Weekly High 137.76
Previous Weekly Low 133.4
Previous Monthly High 142.43
Previous Monthly Low 135.55
Daily Fibonacci 38.2% 137.91
Daily Fibonacci 61.8% 137.67
Daily Pivot Point S1 137.33
Daily Pivot Point S2 136.77
Daily Pivot Point S3 136.28
Daily Pivot Point R1 138.38
Daily Pivot Point R2 138.87
Daily Pivot Point R3 139.43

 

 

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