On Friday, the EUR/JPY appeared to have been firming up and making gains for the second session in a row, moving into territory well above the 129.00 barrier. Previously in the session, the cross traded near the 55-day simple moving average (SMA) near 129.50, which coincided with a Fibo level (from the June-August period).
The 200-day simple moving average (SMA) at 129.76 represents a significant barrier to the continuance of the rebound. The downward momentum is projected to be reduced to a certain extent above the latter. In the meanwhile, the near-term forecast for the cross remains negative as long as it remains below the important 200-day simple moving average, which is currently at 129.76.
EUR/JPY CHART. Source: Tradingview.com
Long-Term EUR/JPY Outlook: Bearish
In the long run, the EURJPY is a negative pairing. For more than four weeks, the Euro has been losing ground against the Greenback. The situation began with the price of $134 as a resistance line. On August 19, the currency pair established strength at the level of 128 per dollar. It took a step back and reevaluated the very same grade on September 22, resulting in a tie. On October 06, the support level of $129 was rechecked and found to be reliable. During the previous week, the price fluctuated between $129 and $128.
Both the quick-moving average (9-day EMA) and the slow-moving average (14-day EMA) are below the EUR/JPY (21 day EMA). If the bulls can push the price over the threshold of $130, the value may continue to fall to the $131 mark and then to $132, depending on the direction of the trend. If the resistance level of $130 is not breached, the price may revert and fall to the support levels of $129, $128, and $127, respectively. The relative strength index for period 14 is, on the other hand, at 50 levels and pointing upward, indicating a buy signal.
The Medium-Term Trend For The EUR/JPY Is Bullish
The EUR/JPY 4-hour chart is positive. When looking at the 4-hour chart, a “W” chart formation has been generated by the price movement in the market. The price has tested the trading range of $128 twice, and the price is rising in the direction of the support levels of $129 and $130, which are in reach. Because the price has passed a key threshold, further price increases are anticipated.
The EUR/JPY is moving above the 9-period exponential moving average and the 21-period exponential moving average, which indicates a positive trend. The relative strength index for period 14 is over 50 levels, and the signal line is pointing up, indicating a buy signal, according to the index.