eurjpy potential final push down towards major support 1848412017

Since our last analysis dated on 28 March 2017, the EUR/JPY had tumbled as expected and hit both the downside targets/supports of 119.10/118.90 and 118.30/19 (printed a low of 117.38 on 04 April 2017). Click here for a recap on our previous report.

Now, let’s take a look at its latest technical elements.

Short-term technical outlook on EUR/JPY

(Click to enlarge charts)

Key technical elements

• The major support for the cross pair rests at the 117.05/116.80 zone which is defined by the lower boundary of the medium-term ascending channel in place since 24 June 2016 low and a Fibonacci cluster (see daily chart).
• Since its 21 March 2017 minor swing high of 121.84, the cross pair has evolved within a short-term descending channel with its upper boundary acting as a resistance at 119.17 which also confluences with the former minor congestion swing low areas of 29 March/31 March 2017 (see hourly chart).
• The lower boundary of short-term descending channel rests at 117.05 which also confluences with the major support zone of 117.05/116.80.
• The hourly RSI oscillator has not flashed any bullish divergence signal yet and remains bearish below its resistance. In addition, the longer-term daily RSI oscillator still has some room left before it reaches an extreme oversold level. These observations suggest that downside momentum of price action remains intact.
• From yesterday’s low (04 April) of 117.38, the price action of the cross pair has started to evolve into a “bearish flag” (a bearish continuation pattern of its on-going minor degree down trend in place since 13 March 2017 high of 122.89). The upper limit of the aforementioned “bearish flag” stands at 118.66.

Key levels (1 to 3 days)

Intermediate resistance: 118.66

Pivot (key resistance): 119.17

Support: 117.05/116.80 (major)

Next resistances: 119.76 & 120.40

Conclusion

The minor degree downtrend remains intact of EUR/JPY. Right now, it may see a push up first towards the “bearish flag” resistance at 118.66 with a maximum limit set at the 119.17 short-term pivotal resistance before another potential down leg materials to target the major support zone of 117.05/116.80.

On the other hand, a clearance above 119.17 is likely to negate the preferred bearish tone for a more pronounced corrective rebound towards the next resistances at 119.76 and 120.40.

Charts are from eSignal

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