Eurjpy Tests The Support

 Eurjpy Tests The Support

EUR/JPY Tests The 159.00 Level As Support, More Bearish Advance Ahead

The losing streak of the EUR/JPY continues as the cross has also recently tested the support near 159.00. According to experts, the negative pressure in the EUR/JPY will continue for the short to medium term and will likely send the cross down by several hundred pairs.

Although there are a lot of support levels under 159.00, the most important one can be seen at 158.62, where the 100 SMA is located. However, this support level will only provide a temporary relief for the EUR/JPY as the pair is expected to drop further.

154.34 Support Remains Relevant

Next up is the 154.34 level, which is a major support for the EUR/JPY bulls as it was the lowest level of October. Although the cross is experiencing negative pressure, analysts believe that the long-term outlook is still positive as the EUR/JPY is trading above the 200 SMA on the D1 chart.

The 200 SMA on the EUR/JPY D1 can be seen near the 153.71 level, which is still a long way from the current trading above the 159 handle.

If we look at the important Simple Moving Averages on the D1, the 20-period SMA is present at 162.25. The 50 SMA, which shows the EUR/JPY medium-term trend, is present at 159.78, while the 100 SMA is seen near 158.64.

So, we can say that the EUR/JPY is present above the 100 SMA and the 200 SMA on the D1 chart. However, the 20 SMA and the 50 SMA are now above the current trading price of EUR/JPY, which shows that the medium to short-term trend is now bearish.

One factor that will enable the EUR/JPY to turn positive is hawkish comments from the ECB officials. At the same time, dovish comments and talks of the continuation of supportive monetary policy by the BOJ will also support a bullish EUR/JPY.

Given the current price action of EUR/JPY, it appears that a revisit of the 100 SMA is highly likely. How the FX cross reacts at this price level will provide clues to the traders about what's ahead.

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