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EUR/JPY Price Analysis: Sinking sharply below 137.00 as risk appetite improves

  • The EUR/JPY daily chart forms a bearish candlestick pattern with bearish implications.
  • In the short term, the EUR/JPY could provide momentum before extending the downtrend.

The EUR/JPY slumped on Wednesday as risk momentum spurred on by lower US inflation data, dispelling the Federal Reserve’s need for aggressive tightening. The reaction was that the US 10-year bond yield fell, dragging USD/JPY down. Therefore, EUR/JPY followed suit, falling more than 100 pips to its daily low at 136.94. At the time of writing, the EUR/JPY is trading at 136.86, down 0.81%.

EUR/JPY Price Analysis: Technical Outlook

From a daily chart perspective, the EUR/JPY is forming a bearish candlestick pattern, which means that the sellers have outperformed the buyers. Furthermore, the currency has broken below the 100 day EMA at 138.03 and at the time of writing it is testing the 4th August high at 136.92, previous resistance turned support. If the latter breaks, sellers will remain in command, paving the way for further losses.

EUR/JPY daily chart

In the short term, the hourly chart of the EUR/JPY illustrates the pair as neutral to the upside, but the pair’s drop below the weekly opening price of 137.32 could pave the way for further losses. The downtrend appears to be losing steam as the Relative Strength Index (RSI) entered an oversold condition, meaning EUR/JPY could gain momentum towards the 50% Fibonacci retracement at 137.50 before trending again bass guitarist.

If the above scenario holds, the first support for the EUR/JPY would be the 137.00 figure. Once broken through, the next support level will be the 10th Aug low at 136.61, followed by the 200 hourly EMA at 136.44, before turning down to the key psychological level at 136.00.

EUR/JPY hourly chart

Key technical levels


Last Price Today 136.9
Today’s Daily Change -0.99
Today’s Daily Change % -0.72
Today’s Daily Opening 137.89
20 Daily SMA 138.23
50 Daily SMA 139.89
100 Daily SMA 138.04
200 Daily SMA 133.85
Previous Daily High 138.32
Previous Daily Minimum 137.26
Previous Maximum Weekly 137.76
Previous Weekly Minimum 133.4
Monthly Prior Maximum 142.43
Previous Monthly Minimum 135.55
Daily Fibonacci 38.2% 137.91
Daily Fibonacci 61.8% 137.67
Daily Pivot Point S1 137.33
Daily Pivot Point S2 136.77
Daily Pivot Point S3 136.28
Daily Pivot Point R1 138.38
Daily Pivot Point R2 138.87
Daily Pivot Point R3 139.43

Source: Fx Street

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