EURJPY Denied a Close Below Tough Support of 115.86

Technical analysis of Forex market

EURJPY today pushed below the 115.86 low of September 2019 producing a 3-year low of 115.71. The pair bounced off this level, that being the 123.6% Fibonacci extension of the up leg from 116.35 to 119.03 driving the price to the mid-Bollinger band at 116.65.

The recent pick up in price action is also reflected in the short-term oscillators with strengthening positive momentum. The MACD, in the negative region, is below its red trigger line but looks to move back above it, while the rising RSI has reached the 50 level. Additionally, the stochastics have adopted a bullish mode exiting the oversold zone, with room to move higher.

Pushing above the mid-Bollinger band may encounter initial resistance from the 50-period simple moving average (SMA) and the 117.21 high. Moving up, the upper Bollinger band overhead at 117.30 and the nearby 100-period SMA at 117.46 could further prevent the pair from climbing towards the 117.93 obstacle and the 200-period SMA at 118.13. Overcoming the 200-period SMA could see buyers come on board to shoot for the 118.72 and 119.03 peaks.

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If sellers retake the wheel, first support could come from the lower Bollinger band and the 115.86 support. A dip lower could challenge the 115.71 border (3-year low and 123.6% Fibo), which if surpassed could send the price to the 138.2% Fibo extension of 115.32 ahead of the 114.84 barrier coming from April of 2017.

Summarizing, the short-term timeframe remains neutral-to-bearish below the negatively charged SMAs and a close below 115.71 would reinforce a negative bearing.