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Wednesday, 08 March 2017 17:46 Written by

Technical Analysis – EURJPY loses steam below 50-day MA; Drops below cloud by XM

EURJPY posted impressive gains of 2.5% in late February/early March, taking prices back within the Ichimoku cloud, having fallen below it for the first time since November. However, the pair found resistance at the 50-day moving average (MA) as the stochastics ran into overbought territory.

The stochastics chart continues to point to a weakening momentum in the near term. The MACD meanwhile remains in bearish territory even after the recent gains, though there is some positive signal coming from the red signal line which is trending slightly upward and is positively aligned with the histogram.

If prices manage to advance higher, immediate resistance will come from the bottom of the Ichimoku cloud at 120.70. But the more significant barrier is the 50-day MA, currently at 121.17. A break above the 50-day MA would strengthen the upside momentum and would put prices within sight of the key 122 level, which is around the cloud top.

Should prices continue to lose momentum however, the tenkan-sen line may provide support at 119.70. A drop below this level could accelerate the decline towards February’s 3-month low of 118.23, which if broken, would open the way towards the 200-day MA at 117.50.

In the medium-term, EURJPY is looking mostly neutral despite December’s bullish crossover of the 50-day MA with the 200-day MA, as price action has been close or below the 50-day MA since January and both MAs are sloping downwards.

 

Sourcewww.xm.com

Read 155 times Last modified on Wednesday, 08 March 2017 17:46

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