Eurjpy Trades Higher With No Clear Direction

 Eurjpy Trades Higher With No Clear Direction

EUR/JPY Trades Above 156 With No Clear Direction

EUR/JPY seems to be lacking direction as it alternates between the bearish & bullish trends. For now, the pair is trading above 156 after staging a recovery from its last day's losses.

The best term to describe the current price action of EUR/JPY is 'consolidation'. According to analysts, any higher moves out of the consolidation range will send the EUR/JPY higher to around 158.65. Next up is the 159.76 level, which also happens to be the high of 30th August.

160.00 Remains Important Resistance Level

If the EUR/JPY bulls take out all of these resistance levels, the next target will be 160.00, which is also a major resistance zone. From its current price, the 160.00 zone is more than 350 pips away, which suggests that the bullish target is based on optimism.

On the contrary, the chances of downside movement in the EUR/JPY are also present, with the nearest support at 156.00 and then 155.50. After that, we also have the 154.34, which is the low of the 3rd of October and is also the monthly low for the pair.

Any bearish correction in the EUR/JPY will send the pair lower towards these levels. In addition, we also have to consider that the BoJ intervention can also play a role in the EUR/JPY direction.

In General, Japan will not be happy with the depreciation of the JPY against the EUR, which can happen if the EUR/JPY moves higher. So once the EUR/JPY moves past a certain limit, the BoJ will intervene in the markets once again to prop the Japanese Yen.

For the long term, the bias for the EUR/JPY is positive as long as it trades above the SMA 200 on the daily charts. For now, the 200 SMA is near 149.72, which means the long-term direction of the EUR/JPY is already bullish despite the consolidation in the near term.

Last but not least, the ECB will also be a key player with the ability to influence the EUR/JPY current price action. A hawkish ECB will favor more upside in the EUR/JPY, while a dovish ECB will lead to a different outcome.

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