After turning lower last week, EUR/JPY may be ready to extend a longer-term uptrend.
Think the pair will pop up in the next trading sessions?
EUR/JPY 4-hour Forex Chart by TradingView
The euro slipped against the yen, even though some European Central Bank (ECB) members are hinting that their easing cycle is just about done.
And why not? With Euro Area PMIs still looking mixed, trade worries brewing out of Washington, and the Russia-Ukraine conflict heating back up, traders weren’t exactly lining up for more risk in the region.
Meanwhile, the yen’s finding plenty of love as the U.S. dollar softens and Bank of Japan (BOJ) officials keep dropping hawkish signals.
Will risk sentiment finally swing the euro’s way in the next trading sessions?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your 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!
EUR/JPY, which has been trending higher since early August, pulled back from the 175.00 psychological handle and is now hanging around 173.50.
What makes the area interesting is that it lines up with the 50% Fib retracement of September’s rally, the 4-hour chart’s 100 SMA, and the uptrend’s trend line support.
If buyers show up with bullish candlesticks and break the current consolidation, we could see a push back toward 174.50 or even a retest of the 175.00 highs.
But if sellers take charge and extend last week’s slide, EUR/JPY could press closer to the trend line and even break lower if it stays under 173.00.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
