- The break of the neutral triangle will result in an expansion of volume and tick size.
- A bearish range shift by the RSI (14) is indicating more downside ahead.
- The violation of horizontal support placed from 136.56 has triggered the downside bias for a shorter period.
The EUR/JPY pair has displayed a less-confident pullback after printing a fresh three-day low of 136.40 on Monday. The cross has recovered minutely to near 136.76, however, the downside remains favored as the asset has violated the horizontal support placed from Thursday’s low at 136.56.
On an hourly scale, the asset is auctioning in a symmetrical triangle that signals for slippage in the volatility followed by an expansion in the same. An expansion in volatility results in wider ticks and heavy volume. The upward sloping trendline of the above-mentioned chart pattern is placed from the August 2 low at 133.40 while the downward sloping trendline is plotted from the August 10 high at 138.40.
The 20-and 50-period Exponential Moving Averages (EMAs) at 136.68 and 137.10 respectively are expected to overlap with each other, which will result in consolidation ahead.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more downside ahead.
Should the asset oversteps the round-level resistance of 138.00, the shared currency bulls will drive the asset towards July 29 high at 139.51. A breach of the July 29 high will send the cross towards July 18 high at 140.80.
On the flip side, the yen bulls could gain control if the asset drops below the August 4 low at 135.64. An occurrence of the same will drag the cross towards the previous week’s low at 134.90, followed by an August 2 low at 133.40.
EUR/JPY hourly chart
-637968082924243802.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD recovers toward 1.0600 on renewed USD weakness
EUR/USD regains its traction and rises toward 1.0600 after spending the early European session under pressure. The renewed US Dollar (USD) weakness following disappointing housing data helps the pair push higher, while markets keep a close eye on geopolitics.
GBP/USD stays below 1.2650 after BoE Governor Bailey testimony
GBP/USD trades in the red below 1.2650 on Tuesday. Although BoE Governor Bailey said a gradual approach to removing policy restraint will help them observe risks to the inflation outlook, the sour mood doesn't allow the pair to gain traction.
Gold extends recovery toward $2,640 as geopolitical risks intensify
Gold price builds on Monday's gains and rises toward $2,640 as risk-aversion grips markets amid intensifying geopolitical tensions between Russia and Ukraine. Meanwhile, the 10-year US Treasury bond yield is down more than 1% on the day, further supporting XAU/USD.
Bitcoin Price Forecast: Will BTC reach $100K this week?
Bitcoin (BTC) edges higher and trades at around $91,600 at the time of writing on Tuesday while consolidating between $87,000 and $93,000 after reaching a new all-time high (ATH) of $93,265 last week.
The week ahead: Powell stumps the US stock rally as Bitcoin surges, as we wait Nvidia earnings, UK CPI
The mood music is shifting for the Trump trade. Stocks fell sharply at the end of last week, led by big tech. The S&P 500 was down by more than 2% last week, its weakest performance in 2 months, while the Nasdaq was lower by 3%. The market has now given back half of the post-Trump election win gains.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.