EUR/JPY Price Analysis: Inks bullish pennant, 148.50 in the spotlight
- EUR/JPY picks up bids to pare the previous day’s losses inside bullish chart formation.
- Sluggish oscillators, 50-SMA challenge buyers but sustained trading beyond 200-SMA keeps bears off the table.
- Clear downside break of 50% Fibonacci retracement could convince sellers to retake control.
EUR/JPY remains mildly bid as it consolidates the previous day’s losses around 148.40 during early Wednesday. In doing so, the cross-currency pair portrays a bullish pennant chart formation on the four-hour play, poking the confirmation point of late.
It should, however, be noted that the sluggish MACD and RSI (14) line challenges the quote’s upside momentum, in addition to the immediate 148.50 hurdle.
Even if the EUR/JPY buyers confirm the bullish pennant breakout, the 50-SMA level of around 149.30 can act as an extra filter ahead of directing the pair towards the theoretical target of near 153.80.
During the likely run-up, the 150.00 psychological magnet and the multi-month high marked in April around 151.60 can act as additional checks for the EUR/JPY bulls.
On the contrary, a downside break of the stated pennant’s support line, close to 147.50, can defy the bullish chart pattern and can direct the pair towards the 200-SMA support level of near 146.40.
However, the 50% and 61.8% Fibonacci retracement levels of the EUR/JPY pair’s March-April upside, respectively near 145.20 and 143.70, can act as additional downside filters before giving control to the bears.
EUR/JPY: Four-hour chart
Trend: Further upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
