Eurjpy Stays In Consolidation Phase

 Eurjpy Stays In Consolidation Phase

EUR/JPY Stays In Consolidation Phase, No Breakout In Sight

After staging an impressive rally for 2 days in a row, the EUR/JPY lost its momentum and ended up giving most of its gains back to the sellers. For now, the EUR/JPY faces bearish pressure as it trades near the 158.00 handle.

Given the current performance of the pair & the fundamental outlook, the EUR/JPY will likely stay in the consolidation phase in the near term. However, any upside break of 158.65 (the high of September) will send the pair to the next target at 159.76 (the high of 2023).

200 SMA Remains Important For EUR/JPY

Overall, the long-term outlook for the EUR/JPY is positive as long as it continues to trade above the 200 SMA (daily chart). For now, the 200 SMA (D1) is hovering near 150.50, which is a lot lower than the current trading price of the EUR/JPY.

The trend analysis of the EUR/JPY tells us that the SMA 20 is located at 157.51 while the 50 (SMA) is hovering near 157.94. Similarly, the 100 SMA and the 200 SMA are present at 156.36 and 150.46.

In addition, the S1 (pivot point) on the daily chart is located at 157.51, which suggests that any downward momentum will lead us to this level. Any further selling in the EUR/JPY will send it to the 156.54, followed by the 155.99 (3rd support).

On the other hand, the R1 on the daily chart (EUR/JPY) is present at 159.03, followed by the R2 present at 159.58. Furthermore, the 3rd resistance point (R3) is currently present at 160.55, which is around 255 pips away from the current trading price.

The bigger picture suggests that the EUR/JPY is poised to go up in the near term unless the fundamentals of the EUR and the JPY change significantly. While we evaluate the EUR/JPY, we also can't ignore the USD/JPY, which is at a higher risk of intervention by the BoJ.

So if the BOJ intervenes on a bullish USD/JPY and sends it lower, similar price action will be repeated in the EUR/JPY as well.

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