EUR/JPY Price Analysis – May 25
There is a tendency that the bullish movement may continue after the pullback because the week may close with a strong bullish candle.
EUR/JPY Long-term Trend: Bullish (Daily Chart)
Resistance Levels: $134.5, $135.0, $135.5
Support Levels: $132.0, $131.5, $131.0
On the long-term outlook, EUR/JPY is bullish and it has been following the upward movement since February 5. However, should the bulls push up the pair and break up $133.5 level with the bullish candle close above the upper boundary of the channel, then the price could target the $134 level. Meanwhile, in case the bears continue to defend the resistance level of $133, the price may return to the $132.8 level.
Will EUR/JPY see a Further Downside?
EUR/JPY is currently trading at $133.2 after touching the daily high of $133.6. There is a tendency that the bullish movement will continue after this pullback because the week may close with a strong bullish candle. However, the currency pair is making an attempt to penetrate the upper boundary of the channel and it is trading above the 9-day and 21-day moving averages which connote an increase in the bullish momentum.
Meanwhile, the technical indicator Relative Strength Index (14) is seen moving to cross into the overbought region with the signal line pointing up to indicates a buy signal. In case the daily bullish candle closes above the upper boundary of the channel, then the bullish movement may continue towards the potential resistance levels at $134.5, $135.0, and $135.5.
Moreover, any bearish movement below the 9-day and 21-day moving averages may expose the currency pair towards the lower boundary of the channel. Therefore, there is a high possibility that the market price may cross below this barrier and locate the critical supports at $132.0, $131.5, and $131.0.
EUR/JPY Medium-term Trend: Bullish (4H Chart)
EUR/JPY is Bullish on the short-term outlook. There has been a bearish breakout towards the upper trend line of the ascending channel. The price decreased further towards the support level of $132.9, the bullish momentum breaks up the level and suddenly interrupted by the bears. The price may likely retest the broken level of the dynamic support level of $132.8 and below as the technical indicator Relative Strength Index (14) is facing the south while the resistance levels are located at $133.6 and above.