EUR/JPY Price Analysis: Broader Formation Suggests Bearish Pressures Ahead

• EUR/JPY falls below 140.00 as the cross dips below the 200 DMA and the 20-day DMA crossed below the 100 DMA.
• The formation of a megaphone top suggests that bearish pressure is on the horizon in the EUR/JPY.
• EUR/JPY Price Analysis: Once it breaks above 138.80, a drop to 135.51 is expected.

The USD/JPY falls below the 200-day EMA at 140.18, extending its losses to three straight trading days, falling 2.40% from hitting last week’s high at 142.93. Therefore, EUR/JPY is trading at 139.26, below its opening price, after reaching a daily high of 140.31.

EUR/JPY Price Analysis: Technical Perspective

From a daily chart standpoint, the EUR/JPY pair is forming a megaphone top, which is usually a bearish formation, which was confirmed once the currency pair broke below the 200 day EMA. Furthermore, the 20 day EMA crossed below the 100 day EMA, exacerbating an acceleration in the downtrend, as sellers look for a break below the December 2022 low at 138.80.

Oscillators such as the Relative Strength Index (RSI) pointing towards oversold conditions and the Rate of Change (RoC) holding below its zero line confirm that sellers are in command.

Therefore, the first support for EUR/JPY would be the December low at 138.80. A break of the latter would expose the September 26 daily low at 137.36, followed by the August 24 swing low at 135.51.

As an alternate scenario, if the EUR/JPY breaks above the 200 day EMA again, a rally towards the 20 day EMA at 142.21 would ensue. Once broken, the 20 day EMA would be exposed. Once broken, it would expose the 100 day EMA at 142.43.

Key Technical Levels for EUR/JPY