Chart Art: Will These Resistance Levels Hold on USD/JPY and EUR/JPY?
The yen has been in selloff mode recently, but can it turn things around soon?
Both USD/JPY and EUR/JPY are closing in on pretty strong resistance levels!
Is the trend still our friend on USD/JPY?
Price has formed lower highs and lower lows inside a falling channel that’s been holding since December last year.
Another test of the channel top seems to be underway, and the Fib tool reveals that this lines up with the 61.8% retracement level.
To top it off, this area of interest coincides with the 200 SMA dynamic resistance, too!
The 100 SMA is below this slower-moving SMA, confirming that the downtrend is more likely to resume than to reverse. In that case, USD/JPY could make its way back down to the swing low at 127.18 or the channel bottom pretty soon.
Stochastic has also made it to the overbought region to reflect exhaustion among buyers. Once the oscillator turns south, more sellers could hop in and ride the bearish wave down.
Here’s one for the range traders out there!
EUR/JPY has been trading sideways on its short-term time frames, finding support at the 138.00 major psychological level and resistance around 142.75.
The pair seems to be setting its sights on the ceiling once more, so another bounce might be in the cards.
Stochastic has been hanging out the overbought region for quite some time, so turning lower would confirm that bearish pressure is kicking in.
If that happens, EUR/JPY could make its way back down to the bottom of the range once more.
However, the 100 SMA just crossed above the 200 SMA to hint that there’s a chance the rally could keep going. A bullish range breakout could set off a climb that’s the same height as the formation, so watch out!