Technical Analysis – EUR/JPY strongly bearish – looking oversold in short-term
EUR/JPY has been plunging since February 21 and recorded the fifth consecutive negative trading day on Wednesday. During today’s European session the pair created a new 5-month low of 130.73 and holds below the 131.15 key level, which was acting as a strong obstacle for the bulls. This penetration suggests an aggressive bearish roller coaster.
From the technical point of view, in the 4-hour chart, the MACD oscillator endorses the negative structure and is falling below the trigger and zero lines. Moreover, the RSI indicator dropped sharply following the bounce off the 50 level and is approaching the 30 area. The 20 and 40 simple moving averages in the near-term are following the downward movement of the price action.
In case of further losses, the pair could hit the 129.30 support barrier taken from the low on September 5. The bearish correction of the ascending move in the medium-term is still in progress.
On the flip side, a jump above the 131.15 resistance level it could take the price action above the 20 and 40 SMAs at 131.40 and 131.80 respectively towards the 132.20 barrier, which holds near the 23.6% Fibonacci retracement level of the downleg from 137.50 to 130.83.