EUR/JPY Price Analysis: Juggles around 140.00 after a vertical sell-off

The formation of Double Top amid less buying interest led to a sheer fall in the Euro bulls.
EUR/JPY is hovering around the critical support at 140.00 and an absence of follow-up buying indicates the Japanese Yen’s strength.
A bear cross, represented by the 20 and 50-EMAs, adds to the downside filters.

Sagar Dua FXStreet

The EUR/JPY pair is displaying back-and-forth moves in a narrow range of 140.00-140.40 in the early Asian session. The cross has turned sideways after a perpendicular downside move amid escalating chatters that the Bank of Japan (BoJ) is aiming to exit from its decade-long ultra-loose monetary policy.

After expanding the range of 10-year Japan Government Bonds (JGBs)’s yields TO +-50 basis points (bps), the BOJ is reviewing the side-effects of easy policy, which indicates that Japanese officials are looking to change their monetary policy approach in parallel with Western nations.

EUR/JPY witnessed a steep fall after failing to extend gains above the horizontal resistance placed from December 28 high around 142.94 amid the absence of sheer buying interest while refreshing a two-week high. This led to the formation of a Double Top chart pattern on an hourly scale, which indicates a bearish reversal.

The asset has dropped to near the demand zone around 140.00 and the unavailability of a follow-up recovery indicates weakness in the Euro bulls.

A bear cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at around 142.00, adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates more weakness ahead.

EUR/JPY may display more weakness if it drops below the crucial support of 140.00, which will drag the asset towards December 20 low at 138.80 followed by January 3 low at 137.39.

On the flip side, a breakout above the Double Top chart pattern around 143.00 will drive the cross towards December 20 high at 145.84. A breach above the latter will expose the asset for more upside towards December 15 high at 146.71.

EUR/JPY hourly chart

EUR/JPY

Overview
Today last price	140.34
Today Daily Change	-2.18
Today Daily Change %	-1.53
Today daily open	142.52

Trends
Daily SMA20	141.58
Daily SMA50	143.3
Daily SMA100	143.08
Daily SMA200	140.66

Levels
Previous Daily High	142.86
Previous Daily Low	141.82
Previous Weekly High	141.45
Previous Weekly Low	137.39
Previous Monthly High	146.73
Previous Monthly Low	138.8
Daily Fibonacci 38.2%	142.46
Daily Fibonacci 61.8%	142.22
Daily Pivot Point S1	141.94
Daily Pivot Point S2	141.37
Daily Pivot Point S3	140.91
Daily Pivot Point R1	142.98
Daily Pivot Point R2	143.43
Daily Pivot Point R3	144.01

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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