EUR/JPY Price Analysis: In consolidation, unable to crack the 137.00 mark on risk-on mood
- EUR/JPY bounced off weekly lows at around 135.51 due to improved sentiment.
- From a monthly chart perspective, an August close below 135.54 would keep sellers in control.
- The EUR/JPY weekly chart depicts the formation of a head-and-shoulders chart pattern, targeting the YTD lows around 124.00.
The EUR/JPY edges higher during the day, above the 136.50 figure, for the first time in the week, snapping two days of consecutive losses as the New York session finishes. As the Asian Pacific session starts, the EUR/JPY is trading at 136.67, with marginal gains of 0.01%.
EUR/JPY Price Analysis: Technical outlook
From the monthly chart perspective, the EUR/JPY shows traders undecided, about to form a dragonfly-doji, after July staggering loss of 4.24%, created a bearish-engulfing candle pattern, which initially drove prices towards August lows around 133.39. If the EUR/JPY fails to achieve a monthly close below 135.54, July’s low will pave the way for further losses. Otherwise, expect prices to seesaw around the 136.20-138.40 area.
Meanwhile, the EUR/JPY weekly chart suggests forming a head-and-shoulders chart pattern, pending to break below the neckline around the 133.00-134.00 area for confirmation. Once achieved, the EUR/JPY profit target will be the 124.00 mark, below the YTD lows at 124.39.
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.
