EUR/JPY Price Analysis: Extends its losses, drops towards 142.20s
- EUR/JPY tumbles but remains above the 20-day EMA, despite RSI’s shifting bearish.
- Short term, the EUR/JPY might re-test the October 5 low of 142.44 before resuming its downtrend towards 141.00.
EUR/JPY continues to fall for the second straight day due to market sentiment turning sour, as portrayed by Wall Street’s set to finish with losses, while US Federal Reserve policymakers remain committed to crushing inflation. At the time of writing, the EUR/JPY is trading at 142.24, down by 0.51%.
EUR/JPY Price Forecast
The EUR/JPY daily chart portrays the pair’s faced solid support at the 20-day EMA around 142.08. Even though Thursday’s daily low was 141.95, sellers could not hold the fort, so the EUR/JPY reclaimed 142.00. It should be noted that the Relative Strength Index (RSI) just crossed below the 7-day RSI’s SMA, indicating that sell orders could be beginning to pile in the pair. Unless the EUR/JPY registers a daily close below 142.00, the pair is still neutral-to-upward biased.
Short term, the EUR/JPY is neutral to downward biased, hoovering around the S1 daily pivot at 142.28. On Thursday, the pair stumbled below the 50, 20, and 100-EMAs, opening the door for further losses, but the fall stalled at 142.00.
Although the cross-currency is downward biased, the Relative Strength Index (RSI) crossed above its 7-RSI’s SMA, meaning buyers are gathering some strength. So a re-test of October 5 daily low at 142.44 is on the cards before continuing downwards.
If that scenario plays out, the EUR/JPY first support would be 142.00. Break below will expose the S2 daily pivot at 141.50, ahead of the next demand zone, and the 200-EMA at 141.28, followed by the 141.00 figure.
EUR/JPY Hourly Chart
EUR/JPY Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
