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Will the EUR/JPY Pair Continue its Bearish Slide?

July 15, 2021

  • EUR/JPY rebounded off resistance at the 50% Fibonacci retracement line.
  • Bearish trend line suggests further resistance at around 131.15 on the 4-hour chart.

 

The Euro has been in a bearish pattern this month against the Japanese Yen, dropping by around 40 pips from close to 132.40. EUR/JPY had traded as low as 129.62 before a slight upside correction, however bears have regained control.

 

EUR/JPY 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, there was a correction above the 130.50 resistance level. The quote pushed well above the 23.6% Fibonacci retracement level of the decline from a high of 132.40 to a low of 129.62, continuing higher.

The pair however, met resistance at the 131.00 level. The quote has remained well below the 100-MA (red) and the 200-MA (blue).

Bears regained control near the 50% Fibonacci retracement level of the decline from the 132.40 high to 129.62 low. A major bearish trend line will form further resistance near the 131.15 level.

For bulls to regain control, the pair would need to break through resistance at the 131.00 and 131.15 levels. If the quote fails to do so, there will likely be further decline below 129.80. The first significant support level is near 129.65. If support is broken here, the quote could decline further towards 128.80.

 

 

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