EURJPY Technical Analysis Update – Euro/Yen Exchange Rate
- The EURJPY rate is trading close to the 100.00 handle. The euro/yen has been in a strong bearish trend over recent trading and the directional bias remains to the downside; nonetheless, these large round number / psychological levels can sometimes prove to be pivot areas.
- This comes as EURUSD hits the 1.2500 level, another major round number in its own right. PA around the 1.2500 level could influence the EURJPY rate and should be monitored accordingly.
- With this in mind we will be monitoring the descending wedge pattern that has recently seen price test upper and lower trend line boundaries as these lines start to converge to a point. A strong price action reversal signal would be needed before we even considered looking for any upside as this would have to be seen as counter trend.
- Any corrective move higher would need to break above 100.00 in the first instance. This level held the EURJPY to the downside on Thursday and Friday last week on the closing basis. Further to this – price may find resistance around the 102 level which is a price structure pivot level in the event of sustained EURJPY upside movement.
- Another point of reference is that MACD divergence is just starting to form on the lower timeframe (sub 4 hour). This is not a reason to look for a reversal in its own right but gives a hint that price may be running out of momentum in the near term.