EUR/JPY technical analysis: Defends support at 120.78, bias remains bearish

EUR/JPY is bid after seven-day losing streak.
The outlook remains bearis despite defense of 120.78.
Dsaily chart shows a channel breakdown.

Omkar Godbole FXStreet Contributor

EUR/JPY is currently trading at 120.93, reprresenting marginal gans on the day, having printed losses in the previous seven trading days.

The pair has again bounced up from the June 3 low 120.78, having defended the key support in the previous two trading days. Even so, it is too early to call a bullish move, as the channel breakdown confirmed on July 18 is still valid.

The 14-day relative strength index is reporting bearish conditions with a below-50 print and the falling moving average convergence divergence (MACD) histogram is signaling a strong bearish momentum.

All-in-all, the odds appear stacked in favor of a drop below 120.78. That would expose the psychological support of 120.00.

A daily close above Friday’s high of 121.28 is needed to invalidate the bearish setup.

Daily chart

Trend: Bearish

Pivot points

1. R3 121.66
2. R2 121.47
3. R1 121.17
PP 120.98
1. S1 120.68
2. S2 120.5
3. S3 120.2

Author

Omkar Godbole

FXStreet Contributor

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

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