- The EUR/JPY is approaching levels where it threatens to reverse the trend in the medium term.
- A further decline could see the pair fall to the 50-day SMA.
EUR/JPY is threatening to reverse its medium-term uptrend and start a new downtrend. This is important since, according to the theory of technical analysis, “the trend is your friend”, so if the medium-term trend reverses, the probabilities will favor more declines to come.
EUR/JPY Daily Chart
A break below 163.21 (Nov 8 low) would likely confirm a bearish trend reversal. The next downside target is likely the 50-day SMA support at 162.17.
The Relative Strength Index (RSI) momentum indicator is stabilizing around the 49 mark, but appears vulnerable to extending another leg lower. This further reinforces the bearish trend reversal thesis.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
