EUR/JPY outlook: EUR/JPY falls sharply for the second day

Slobodan Drvenica Windsor Brokers

EUR/JPY

The cross extends steep fall into second straight day, losing 1.3% until early US session on Friday, following 1.6% drop on Thursday, as yen rose sharply on weaker dollar and speculations that BoJ is about to start revisions of its ultra-loose monetary policy.

Strong bearish acceleration broke through pivotal support at 140.00 (psychological) and 139.12 (Fibo 61.8% of 133.39/148.40 rally), retracing the most of 137.38/142.85 corrective leg and signaling that larger bears are tightening grip for possible continuation after limited corrective phase.

Formation of 10/200DMA death-cross contributes to negative outlook, as bearish momentum is strengthening on daily chart and RSI and Stochastic indicators are heading south.

Firm break of 137.33/38 pivots (Sep 26/Jan 3 lows) would signal continuation of the downtrend from 148.40 (2022 high).

Upticks under broken 140 support, reverted to solid resistance, should offer better selling opportunities.

Res: 139.12; 140.00; 140.37; 140.68.
Sup: 137.91; 137.38; 136.93; 135.51.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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