EUR/JPY may break out of the range
2023.01.31 09:23
EUR/JPY may break out of the range
Since the midpoint of October, when the price reached its eight-year high of 148.39, it has been in a downward trend. The pair is currently trading sideways between the 50-day and 200-day simple moving averages (SMAs) in the short term.
Momentum indicators currently point to an intensification of bearish forces. In particular, the RSI crossed below its 50-neutral mark, while the stochastic oscillator posted a bearish cross within the 80-overbought zone.
Initial support could be found at the recent low of 140.54 if sellers are successful in driving the price below the 200-day SMA. Before the low of 137.38 in 2023 is examined, the price could fall below that area to 137.91. The price may then reach the 135.50 hurdle if it breaches that zone.
On the other hand, if the pair manages to break out of its sideways pattern, the most recent support level of 142.29 could thwart any upward movements. The bulls could target 142.93 if they can break through this barrier before the June resistance of 144.30 is tested. The price may find it difficult to overcome the December high of 146.73 even higher.
In a nutshell, EURJPY appears unable to break out of its narrow range, but near-term risks remain negative. Consequently, a significant decline could result from a close below the 200-day SMA.
