EUR/JPY technical analysis: Drops to 50-day MA support
- EUR/JPY is flirting with 50-day MA support amid the drop in the S&P 500 futures.
- Bulls need a break above the trendline sloping downwards from April highs.
EUR/JPY fell to the 50-day moving average (MA) support of 119.04 soon before press time, having faced rejection at the resistance of the trendline connecting April 17 and July 1 highs in the early Asian trading hours.
As of writing, the pair is trading at 119.14, representing 0.40% losses on the day.
The pair has failed at least three times in the last four days to take out the descending trendline
That has strengthened the case for a convincing break below 119.04 and a deeper drop to 118.69 (Sept. 16 low).
On the higher side, a convincing daily close above the descending trendline is needed to confirm a bullish reversal.
The bullish breakout, however, may remain elusive, as the US equity futures are flashing signs of risk aversion. As of writing, the futures on the S&P 500 are down 030%. So, the anti-risk Japanese Yen will likely remain better bid during the day ahead.
Moreover, the Bank of Japan (BOJ) kept key policy tools unchanged a few minutes before press time, leaving the JPY pairs at the mercy of the broader market sentiment.
Daily chart
-637044614722864639.png)
Trend: Bearish
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
