EUR/JPY - Stuck in a 100-pip range

EUR/JPY stuck in a 100-pip range (135.00 to 136.00).
A high probability of a downside break as indicated by spinning top-like candles.

Omkar Godbole FXStreet Contributor

The EUR/JPY pair has been restricted to a 100-pip range (135.00-136.00) comprised of spinning top-like candles, suggesting the rally from the Jan. 11 low of 133.02 may have run out of steam.

The EUR bulls failed to take out 136.00 in a convincing manner in the last three trading days seemingly due to comments from ECB officials this week, highlighting concerns regarding the speed of the rise in the EUR.

Meanwhile, the downside has been capped around 135.00 levels, largely due to persistent demand in the USD/JPY pair around/below 111.00 levels.

As of writing, the currency pair is trading at 135.70. The spinning top-like candles indicate bulls are losing interest, given the pattern is found at the top of the uptrend. Hence, downside break of the 100-pip range is more likely.

The struggle for direction may come to an end later today following the release of the Japanese industrial production data. Also, Bundesbank President Weidmann speech could influence EUR pairs.

EUR/JPY Technical levels

An upside break of the trading range (135.00-136.00) would open doors for 136.64 (Jan. 5 high) and 137.00 (target as per the measured height method). On the downside, breach of support at 135.00 could yield a sell-off to 134.00 (target as per the measured height method) and 133.69 (50-day MA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Low
1H	Bullish	Neutral	Expanding
4H		Neutral	Expanding
1D	Bullish	Neutral	Expanding
1W	Bullish	Neutral	Low
Updated Jan 18, 01:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.