- EUR/JPY is in a downtrend but it has reached oversold levels according to the RSI.
- The pair is closing in on key support and could find its feet and pullback.
EUR/JPY extends its decline on Monday but reaches oversold levels. The pair is in a short and medium-term downtrend since the October 31 peak, and given the technical analysis dictum that “the trend is your friend” the odds favor more downside to come.
However, according to the Relative Strength Index (RSI) the pair is in the oversold zone (below 30) and this means short-holders should not add to their positions. It indicates there is a higher probability of a pullback occurring and prices recovering.
EUR/JPY Daily Chart
EUR/JPY has almost reached support at around 156.50 from the trendline formed by joining the August and September lows. There is a strong possibility the pair could stall at the line and consolidate.
A deeper sell-off, however, could take EUR/JPY down to 154.00 – 155.00, at the actual August-September lows.
(This story was corrected on December 2 at 15:07 GMT to say "EUR/JPY has almost reached support..." instead of AUD/USD as previously stated.)
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 drops below 1.0500 after US PMI data
EUR/USD stays under bearish pressure and trades below 1.0500 on Monday. The upbeat ISM Manufacturing PMI data for November provides an additional boost to the US Dollar, forcing the pair to extend its slide in the American session.
GBP/USD slumps below 1.2650 on broad USD strength
Following a consolidation phase in the early European session, GBP/USD turns south and trades below 1.2650 on Monday. The pickup in the safe-haven demand for the US Dollar, in addition to the better-than-forecast US Manufacturing PMI data, weighs on the pair.
Gold stays below $2,650 as US yields push higher
Gold starts the new week on the back foot and trades below $2,650. The renewed US Dollar strength and the recovery seen in the US Treasury bond yields don't allow the pair to stage a rebound despite the risk-averse market atmosphere.
The week ahead: Payrolls take centre stage, as French government poised to collapse
At the start of this week, the focus is likely to be on France. On Sunday, Marine Le Pen said that her party’s talks with the government led by Michel Barnier, had broken down, which paves the way for a no-confidence vote in the technocratic government that has no majority in Parliament.
Trump warns BRICS over Dollar rival plans
Donald Trump, the incoming U.S. President, has issued a strong warning to BRICS nations over their plans to challenge the dominance of the U.S. dollar in global trade.
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.