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Technical Analysis: EUR/JPY Tested 118.07 Low on Correction Pullback from 124.00

Posted by Chris Advincula on Mar 3, 2017 6:30:38 AM

EURJPY.3.3.2017.jpg 

(Mar 3 Friday) EURJPY shows a steady decline of 600 pips from the high of 124.07 (Dec 7) to test the low of 118.07 (Feb 25) on this 8-hour chart with a downward channel formation. The rapid rise of the EURJPY from 113.10 (Oct 24) to the high of 124.07 (Dec 7) proved to be unsustainable gains as the euro weakened versus the yen as the year came in with a steady correction pullback even below 118.63 (50% Fibo retracement).

At the start of the year, we have seen lowering peaks; 123.75 (Jan 9) - 123.30 (Jan 27) - 121.35 (Feb 10) and 120.50 (Mar 2). The 14 and 30 day simple moving averages have formed resistance lines at 122.50 - 122.60. 

The latest 14 DMA move fell from 120.75 dips to 119.50 and meets with the 30 DMA at 119.50. However, the path of the heavier 30 DMA shows a steady decline from 122.00 to 119.50.

The 14 day RSI (relative strength index) shows good rebound from the 27-30 oversold level, which was the spot equivalent dip to the 118.07 low (Feb 25). The current RSI is at 62, where if it meets the 70 overbought level normally implies a reversal, perhaps at the 122.50 - 123.00 region.

The near term support levels are:  119.50, 118.50 and 118.00 - if broken, might test 117.33 level. (Fibo 61.8%)

 

Topics: EURO, technical analysis, Forex, Japanese Yen, EURJPY

 

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