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Analysis of EUR/JPY: Minor correction before a bullish breakout

EUR JPY Price Analysis

JPY is the second most important currency of Japan and EUR/JPY is one of the most popular cross-currency pairs in the world. The pair has been pair for a long time and investors use EUR/JPY as a hedge against risk in both currencies. Despite all this, EUR/JPY has recently been in decline at 0.977510 and -0.001584, with JPY sitting at 113.22 per Euro while USD sits at 1.103878 and -0.001583.

The pair has a very important resistance level at 123.63 per Euro and a resistance level at positive 1.090000 as well, which I must remind you that the figure is important for long-term investors in this currency pair, but in some cases the level can act as a double top or head and shoulders pattern due to the price history of this popular cross-currency pair. If the bulls can break through 123.63 then we can expect price action to hit 125.15 per Euro with further resistance at 127.78 per Euro and further up at 129.86 per Euro. If the bears can push price action below 113.61 then we can expect price action to hit 111.08 per Euro with further support at 108.89 and 105.85 per Euro as well.

The RSI indicator

It is currently trading at 49 and creating a neutral signal, but there is an uptrend in the RSI and it is for this reason that I mentioned that 123.63 may act as a double top or head and shoulders pattern if we look at the price history of this pair.

Still, the RSI indicator is creating a neutral signal but it is slowly trading higher, so if the bulls can break 123.63 and continue to break 125.15 then there is high probability that this pair will make a U turn towards 123.63 and create new highs which may lead to a bullish breakout to 129.86 per Euro or higher depending on the strength of the bulls at that time.

The MACD indicator is producing a strong bearish signal and is currently trading at -0.001661 and creating a crossover signal, so there is a possibility of a crossover to the downside in EUR/JPY if price action breaks below 113.61 per Euro and drifts even deeper.

Background:

EUR/JPY, the cross currency pair between Euro and Japanese Yen, was created in 2000 with the intention of showing how two major currencies performed against each other. The pair is one of the most heavily traded pairs in the world, with high liquidity and it could be used as a hedge against risk since both key currencies are widely traded against each other. EUR/JPY also has an important resistance level at 123.63 per Euro where price action can close the short positions and traders can cover the gains or make new short positions.

The Japanese yen has recently been in decline at 0.977510 and -0.001584, with JPY sitting at 113.22 per Euro while USD sits at 1.103878 and -0.001583. It is not yet clear whether if the yen will continue its recent significant cap in this pair or if it will bounce back in a bullish manner, but if we look at the price history of EUR/JPY over a long period then we can see that after reaching 123.63 per Euro new highs have created many times and the price has reached another high of 128.

What is an analysis of EUR/JPY?

An analysis of EUR/JPY is an article that gives you a deeper look into the currency pair without giving you some advice or an indicator. Some people ask what the difference is between an analysis and a forecast. The difference is, while a forecast gives you a prediction of price action and traders can copy it if they find it to be profitable, an analysis gives you more information and uses charts to support the information so that readers can make up their own minds about this particular currency pair.

An analyst who writes analyses for FXStreet does not give any particular advice on high-risk trading but presents all opinions, projections and projections in this article. If readers want to know about the best trading strategies for high risk this kind of article is the wrong place to look for it, but if you want to learn more about a particular currency pair then it is a perfect place.

What do I need to understand an analysis of EUR/JPY?

To understand the analysis of EUR/JPY you do not need much experience in technical analysis or charting since all you need is some basic understanding of how price action moves, reading charts and watching the price. If you want to get more proficient at technical analysis or charting then we suggest you sign up for a free demo account with FXStreet and try our advanced charting features that are available on the website.

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