November 01, 2018
After two consecutive daily advances, EUR/JPY is now struggling to add to recent gains amidst some renewed selling pressure hitting the European currency. The resumption of the downtrend could well see October’s low in the 1.2660 region retested ahead of August’s low at 124.91.
By analyzing the daily technical chart one can see that pair is heading towards south side with the formation of bearish engulfing candlestick pattern as we can see that it is falling down after retesting the moving average line. From technical prospective we can see that a downtrend line is lying on the daily chart which is providing the bearish momentum.
Overall pair is making lower lows and lower highs on the daily technical chart and presently it is trading and sustaining below the crossed moving average lines and a daily closing above this level will change the outlook from bearish to bullish. From technical prospective we can see that failure of rounding bottom pattern has turned the sentiments from bullish to bearish.
The 125.00 seems as the stumble block for bear ansd a valid breakout of this level will open the way towards the 124.50 and 124.00 level in near term. On contrary a daily closing above the 130.00 level will confirm the bullish trend. Odds are in favor of bears. Intraday bias remains bearish on the pair. The short term to intermediate picture is mildly bearish.
RSI has arrived into negative territory which is favoring the bears. A bearish crossover on the MACD indicator is generating bearish signal and providing strength to the bears, which is a recent development. The 130.00 level is immediate resistance level followed by 131.80 whereas 125.00 levels is strong key support level followed by 124.50 levels.