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EUR/JPY Signals Bullish Continuation

ByFan Yang
Published 09/14/2014, 08:47 PM
Updated 07/09/2023, 06:31 AM
EUR/USD
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EUR/JPY
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EUR/JPY is signaling a bullish continuation scenario after last week's sharp rally from around 136. The daily chart shows a market that has formed a price bottom as price moved above 138.00.

Also note that price has broken above a falling trend line that originated from the April 1st high of 143.47. Further price is now above the 100-, and 50-day simple moving averages, which at least shows loss of bearish bias. The daily RSI is clearing above 60, which shows loss of bearish momentum.

The EUR/USD also showed a possible price bottom last week.

EUR/JPY Daily Chart 9/15
EUR/JPY Daily

The next challenge for EUR/JPY will be the 140 handle. The 200-day SMA is just below this psychological level, which has also been a support/resistance pivot (resistance in June, and support in March and April). A break above 140 will advance the bullish continuation scenario, opening up the high on the year at 145.69

If price pulls back, a bullish market should hold EUR/JPY above 50-day SMA around 137.30 or at least above 137.00. A break below 137.00 puts the bullish continuation scenario on hold, and suggests further consolidation mode, if not the bearish continuation mode.

When we look at the weekly chart, we can see that last week's price action is indeed a strong bullish continuation type of candle that shows the market is ready to break above what looks like a pennant that has been forming since the beginning of the year.

Price is at the cusp of breaking above the 50-week SMA which would return the bullish bias EUR/JPY has had since 2012. Also note that the weekly RSI has tagged above 70 and just bounced up from 40, which shows maintenance of the bullish momentum.


EUR/JPY Weekly Chart 9/15

EUR/JPY Weekly chart 9/15


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