The EUR/JPY pair is currently consolidating near the 169.00 level after a strong upward movement that saw it reach multi-year highs around 171.00. The pair is stabilizing around the 20-day Simple Moving Average (SMA) near 169.60, which is acting as a strong support despite being breached. This consolidation phase is further supported by the Relative Strength Index (RSI) reading of 53, indicating a balanced market sentiment between buyers and sellers. The Moving Average Convergence Divergence (MACD) has also signaled a bearish crossover, suggesting a potential short-term bearish pressure that may lead to a correction or further consolidation before resuming the uptrend.
The broader bullish trend in the EUR/JPY pair remains intact, supported by the 100- and 200-day SMAs around 164.00 and 161.00, respectively. These moving averages act as crucial support levels against prolonged bearish movements, confirming that any recent downturns should be viewed as corrective rather than indicative of a trend reversal. The pair’s proximity to key support levels and the overall market sentiment displayed by the RSI and MACD readings suggest that market participants are assessing the situation before determining the next move.
In this context, traders should exercise caution and monitor price action near the 20-day SMA to gauge potential support levels. The 169.00 level remains a key area to watch for any signs of a breakout or a reversal, as a sustained move above this level could signal a resumption of the uptrend towards higher resistance levels. On the other hand, a failure to hold above the 20-day SMA may lead to further downside pressure, with the 100- and 200-day SMAs acting as critical support zones to watch for any potential trend reversals.
Overall, the EUR/JPY pair is currently in a consolidation phase near the 169.00 level, supported by key SMAs and technical indicators. While the recent bearish crossover on the MACD suggests a short-term downside pressure, the broader bullish trend remains intact, signaling that any corrections should be viewed as opportunities to re-enter long positions. Traders should monitor price action around key support and resistance levels to determine the next potential direction of the pair in the coming sessions.
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