EUR Technical Analysis

Friday’s NFP report had the potential to re-stoke risk aversion, and price action in the Yen indicated as such in the immediate aftermath of the print as we finally saw prices break below 121.50, printing a lower-low at 120.81 ahead of last week’s close. But since, we’ve seen bullish price action thus far on the new week, and with yet another false down-side breakout in EUR/JPY, traders should approach short-side continuation strategies with caution. On the chart below, we’re taking a look at the ‘bigger picture’ move in EUR/JPY, as defined by a down-ward sloping trend channel that’s caught a considerable amount of EUR/JPY price action over the past eight months.


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Daily price is on the breakout with 100 SMA to be broken to above for the primary bullish market condition: the price was bounced from 0.7993 resistance level for the ranging waiting for the bullish trend to be continuing or for the secondary correction to be started.

Daily price is located below SMA with period 200 (200 SMA) for the primary bearish market condition with the ranging within the following support/resistance levels:

• 1.4826 resistance located near 200 SMA on the border between the primary bearish and the primary bullish trend on the chart, and
• Fibo support level at 1.4379 located below 200 SMA on the primary bearish area.

If the price breaks 1.4826 resistance on daily close bar so the bullish reversal will be started,
If the price breaks 1.4379 support level to below on close bar so the primary ebarish trend will be continuing.

D1 price is located near and above Senkou Span line which si the virtual border between the primary ebarish and the primary bullish trend on the chart. The price is on secondary correction within the primary bullish market condition for 1.5135 support level to be testing for the daily bearish reversal to be started.

The weekly price is on bearish breakdown: price is testing 109.20 level to below for the bearish trend to be continuing, otherwise - ranging bearish condition.

Weekly price is on bullish breakout for 0.8314 resistance level to be broken to above for the bullish breakout to be continuing.

If W1 price breaks 0.8314 resistance level on close bar so the bullish breakout will be continuing.
If not so the price will be on bullish ranging within the levels.

Weekly price is on ranging condition located inside Ichimoku cloud within key narrow support/resistance levels waiting for the direction of the trend to be started.

If W1 price breaks 1.4823 resistance level on close bar so the bullish reversal will be started.
If W1 price breaks 1.4180 support level on close bar so the bearish trend will be resumed.
If not so the price will be on bearish ranging within the levels.

Weekly price broke Ichimoku cloud for the bearish reversal: the price is testing 1.4785 support level to below for the bearish breakdown to be continuing with 1.4433 level as a nearest weekly bearish target.

If W1 price breaks 1.5645 resistance level on close bar so the bullish reversal will be started.
If W1 price breaks 1.4785 support level on close bar so the bearish trend will be continuing.
If not so the price will be on ranging within the levels.

Underneath current price action are three longer-term support levels of interest, with 112.00 being the 76.4% Fibonacci retracement of the 2008 high to the 2012 low; 110.81 functioning as the July ‘swing-low’ in the pair, and 109.19 being the ‘Brexit low’ in EUR/JPY. These levels can be utilitarian, as traders can use these as short-term profit targets for faster strategies looking to take advantage of near-term bearish momentum. But for traders with longer-term outlooks or approaches, more interesting and more attractive from a risk-reward standpoint could be support coming-in around either 112.00 or 110.81. This could open the door to top-side strategies in anticipation of the September BoJ meeting. Outside of any major macro-economic ‘risk off’ events, we’ll likely see markets attempting to anticipate another increase in stimulus out of Japan ahead of that rate decision.

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Daily price is on the secondary correction to be started on open daily bar for now: the price is on breaking 0.8387 support level to below for the correction to be continuing. Chinkou Span line is crossing the price to below for the good possible breakdown.