EURJPY Price Tests Support Level of $122, Reversal Is Possible

EURJPY Price Analysis – October 16

Last week bearish movement may be a pullback to the long-term trend. The price may bounce at the $122 level to continue the bullish trend in case the bulls defend the support level and it will increase towards the resistance levels at $124, $125, and $126.

EURJPY Market

Key Levels:

Supply levels: $124, $125, $126
Demand levels: $122, $121, $120

EURJPY Long-term Trend: Bearish

EURJPY market is bearish in the daily chart. Last two weeks, the bulls dominated the market immediately after the price hits the support level at $122. The price then increases towards the resistance level of $125 after penetrating the $124 level. The bears interrupted further price increase with the formation of a bearish engulfing candle. The currency pair was under the bearish pressure last week and the price decreases to the last two weeks previous low at $122.

EURJPY Daily chart, October 16

The fast period EMA (9) has crossed the slow period EMA (21) downside coupled with the price trading below the two EMAs is an indication that the bears dominate the market. Last week bearish movement may be a pullback to the long-term trend. The price may bounce at the $122 level to continue the bullish trend in case the bulls defend the support level and it will increase towards the resistance levels at $124, $125, and $126. Below the demand level at $122 are $121 and $120 levels.

EURJPY medium-term Trend: Bearish

EURJPY is bearish in the medium-term outlook. The price increase was opposed by the sellers before it reaches the resistance level at $125. Price reverses and declines to test the support level at $122. The bearish momentum is getting weak and the price may bounce to continue the bullish trend.

EURJPY 4-hour chart, October 16

EURJPY is trading below the 9 periods EMA and 21 periods EMA and the two EMAs are following the trend of the price. The relative strength index period 14 is bending down at 40 levels to indicate a sell signal. Next week, traders can place a buy stop at $123.821, take profit at $125.295, and stop-loss at $122.825.