HomeContributorsTechnical AnalysisEUR/JPY Technical: Bulls in Hesitant Mode Again as ECB Looms

EUR/JPY Technical: Bulls in Hesitant Mode Again as ECB Looms

The price actions of the EUR/JPY have shaped the expected minor slide toward the highlighted support of 155.90 as mentioned in our previous report. The cross pair printed an intraday low of 154.42 on 3 October 2023 before it reverted to a choppy up move to retest the 159.80 major resistance (31 August 2023 swing high & February/May 2008 congestion area) in the past three weeks.

The bears seem to be lurking around the corner

Fig 1: EUR/JPY medium-term trend as of 26 Oct 2023 (Source: TradingView, click to enlarge chart)

Fig 2: EUR/JPY minor short-term trend as of 26 Oct 2023 (Source: TradingView, click to enlarge chart)

Right now, the current key technical elements are showing potential signs of a bearish momentum resurgence at least in the short-term as ECB monetary policy decision looms.

Firstly, the daily RSI momentum indicator has staged a negative reaction from a parallel resistance at the 60 level on Tuesday, 24 October which suggests a lack of bullish momentum follow-through for the recent up move from the 3 October 2023 low of 154.42 (see figure 1).

Secondly, on the shorter time frame 1-hour chart, the price actions of the EUR/JPY have just staged a bearish breakdown from the minor ascending channel support in place since the 4 October 2023 low coupled with a bearish momentum reading from the 1-hour RSI as it retreated below 50 level and has not hit an extreme oversold level yet (see figure 2).

Watch the 158.95 key short-term pivotal resistance for a potential slide towards the next intermediate support zone at 157.10/156.80 and a break below 156.80 may a revisit of 155.80 next.

On the other hand, a clearance above 158.95 invalidates the bearish move for a probe on the 159.80 major resistance again.

MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading