Missed the breakdown on EUR/JPY?
This yen pair recently fell through its ascending trend line that had been holding since the start of the year, indicating that a downtrend may be in the cards.
If you’re hoping to catch this potential reversal, here’s a quick retest opportunity on the 4-hour time frame.
EUR/JPY 4-hour Chart by TradingView
Thanks to improvements in Japan’s economic data recently, the yen has been gaining ground against most of its forex peers in the past weeks.
Yen bulls are likely getting their hopes up for an earlier exit to the BOJ’s negative rates era than previously anticipated but might have to hold out for more clues in next week’s policy statement.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
For now, EUR/JPY is pulling up from its dive, retreating to the Fibonacci retracement levels on the 4-hour time frame.
Price seems to be hitting a ceiling at the 50% Fib already and could resume its slide to the swing low at 160.22 or even to the next downside targets at S1 (159.70) then S2 (158.64).
A larger pullback could still reach the 61.8% retracement level closer to the broken trend line, R1 (162.27) and 100 SMA dynamic resistance.
On the subject of moving averages, the 100 SMA is above the 200 SMA to suggest that there’s still a chance the uptrend might resume. Then again, Stochastic is already heading south to hint that sellers have the upper hand.
Do you think EUR/JPY could gain traction on its selloff from here?
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