February 4, 2023

Retraces from weekly highs and drops below the 100-DMA

  • EUR/JPY forms a hanging man as it fails to conquer the 100-day EMA, suggesting further downside is expected.
  • EUR/JPY Price Analysis: The pair would be bearish below 141.00; otherwise, it could challenge 142.00.

EUR/JPY snapped two days of consecutive gains and retraced some of its gains as the EUR/JPY clashed with the 100-day Exponential Moving Average (EMA) at 141.83 but could not crack it. Therefore, the cross dived beneath the latter, with Tuesday’s session closing at 141.65. As the Asian session begins, the EUR/JPY is trading at 141.62, registering minuscule losses of 0.04%.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY remains sideways, even though the pair reached a two-week high at 142.20. Although the EUR/JPY recovered 2% since last Friday, Tuesday’s price action formed a hanging man, suggesting the exchange rates would aim lower. Nevertheless, the EUR/JPY would face a confluence of support areas, like two previous downslope resistance trendlines, around 141.00. Once those trendlines are broken, the next zone of demand tested would be the 20-day EMA at 140.79, ahead of the 200-day EMA at 140.20

However, if buyers can hold above 141.00, a retest to the 100-day EMA at 141.73 is on the cards. A decisive break would expose the 142.00 psychological figure, followed by the January 11 high at 142.85.

EUR/JPY Key Technical Levels

 

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