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Technical Analysis – EURJPY lacks direction but trendline is a ray of hope
October 27, 2020 9:29 amVideo
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EURJPY could not close above its 50-day simple moving average (SMA) for the second time this month despite piercing it, pulling back into the 123.00 area.
The above bearish action kept the market trajectory from the 127.06 peak on the downside, but the short-term ascending trendline that has been navigating the price since the drop to 122.36 is a ray of hope that the pair may attempt to regain ground and re-challenge its 50-day SMA and the 124.00 region. That said, the weak momentum in the RSI and the MACD, which continue to hover around their neutral levels, is deterring over a meaningful upside correction in the short run.
Currently, the 23.6% Fibonacci retracement of the 114.42 – 127.06 upleg seems to be adding some pressure around 124.07. Should it give way, the door would open again for the 50-day SMA at 124.50, where any violation could see an extension towards the swing high of 125.00. Beyond the latter, the price could stretch towards the key 126.40 resistance if the 125.60 barrier does not set a trap.
Alternatively, if the trendline proves fragile around 123.50, the price may next seek support around the 123.00 mark. Breaching that floor too, the bears should push below September’s trough and the 38.2% Fibonacci of 122.23 to lengthen the downtrend towards the 200-day SMA and the 50% Fibonacci of 120.75. Note that the bearish cross within the 20- and 50-day SMAs remains intact and unless it is corrected that would keep promoting a bearish trend extension.
Meanwhile in the medium-term picture, the pair adopted a neutral profile following the break below June’s high of 124.42.
Summarizing, EURJPY maintains a neutral bias in the short-term window. A decisive close above the 50-day SMA or below the upward-sloping trendline could trigger the next move in the market.
The post Technical Analysis – EURJPY lacks direction but trendline is a ray of hope first appeared on XM.
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