- EUR/JPY fades bounce off intraday low after reversing from one-week high the previous day.
- Bearish candlestick formation, failure to cross 21-DMA keep sellers hopeful.
- Three-week-old horizontal area acts as extra filter towards the north.
- Ascending trend line from early April appears the key support to watch during fresh downside.
EUR/JPY struggles around 155.80 heading into Tuesday’s European session, fading the bounce off the intraday low after reversing from a one-week high the previous day.
The cross-currency pair’s previous rebound from the intraday low appears to have limited acceptance as the 21-DMA and Monday’s bearish Doji candlestick on the daily formation prod the buyers.
Adding strength to the downside bias are the bearish MACD signals and a steady RSI (14) line.
With this, the EUR/JPY prices are likely to remain below the 156.00 round figure and can drop towards the latest trough surrounding 153.40 marked the last week.
However, an upward-sloping support line from early April, close to 152.85 by the press time, appears a tough nut to crack for the pair sellers, a break of which will drag the quote towards May’s peak of around 151.60.
On the contrary, a daily closing beyond the 21-DMA hurdle of around 156.30 isn’t a sure signal for the EUR/JPY rally as a three-week-long horizontal resistance area surrounding 156.70-90, quickly followed by the 157.00 round figure, will challenge the bulls before giving them control.
In that case, the yearly high marked in June around 158.00 and the 160.00 round figure will be in the spotlight.
EUR/JPY: Daily chart
Trend: Downside expected
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