EUR/JPY Price Analysis: Hits 4-day low belowC158.00 on bearish-engulfing pattern
- EUR/JPY dips to 157.03, influenced by the restrictive policy stance of major global central banks.
- The cross is bearish after failing to cling to the 158.00 figure.
- The EUR/JPY could rally and test 157.55/60, before resuming its downtrend.
EUR/JPY dropped to a new four-day low of 157.03 on Thursday, courtesy of risk-aversion, after major global central banks decided to hold rates unchanged but kept their restrictive policy stance, led by the Federal Reserve and the Bank of England. At the time of writing, the pair exchanges hands at 157.27, losses a minuscule 0.07%, as Friday's Asian session begins.
The EUR/JPY daily chart portrays the pair as neutral-biased, though tilted to the downside. Failure to cling to the 158.00 mark exacerbated the cross fall, clearing crucial support levels, like the Kijun and Tenkan-Sen levels, each at 158.17 and 157.64. Nevertheless, bears must drag prices below the latest two swing lows, September 14 and 11, each at 156.64 and 156.58, respectively. At that point, the pair could extend its losses toward the bottom of the Ichimoku Cloud (Kumo) at 154.50.
Short-term, the EUR/JPY is downward biased, with price action in the hourly chart standing below the Kumo, while the Tenkan and Kijun-Sen are in a bearish, orderly way. Nonetheless, the cross is set for an upward correction towards the confluence of the Kijun-Sen and the 50% Fibonacci retracement at around 157.55/60. After that, the cross-currency pair's first support would be the Tenkan-Sen at 157.28, followed by the 157.00 figure, ahead of dropping towards 156.50.
EUR/JPY Price Action – 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.
