EUR/JPY Price Prediction: Reaches Oversold Levels as Downtrend Extends

  • EUR/JPY is in a downtrend but has reached oversold levels according to the RSI.
  • The pair is approaching key support and could find its base and pull back.

EUR/JPY extends its decline on Monday but reaches oversold levels. The pair is in a short- to medium-term downtrend since the October 31 peak, and given the technical analysis dictum that “the trend is your friend,” the odds favor more declines to come.

However, according to the Relative Strength Index (RSI), the pair is in the oversold zone (below 30) and this means that shorts should not add to their positions. It indicates that there is a higher probability of a pullback occurring and prices recovering.

EUR/JPY Daily Chart

AUD/USD has almost reached support around 156.50 from the trend line formed by joining the August and September lows. There is a strong possibility that the pair stops on the line and consolidates.

A deeper sell-off, however, could take EUR/JPY to 154.00 – 155.00, at the current August-September lows.

Source: Fx Street

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