EUR/JPY extends the weekly bearishness and revisits the 128.70 region, where some initial contention has emerged so far.

Further losses in EUR/JPY remains well in the pipeline in light of the recent price action and following the risk aversion scenario. That said, a deeper pullback could initially visit the 2022 low at 127.91 (February 24) followed by the December 2021 low in the mid-127.00s (December 20).

On the 15-minutes chart, EUR/JPY is oscillating in a range of 129.13-129.72. The cross is forming a bullish flag pattern, which signals a directionless move after a strong run towards the north and leads to a further upside if consolidation breaks out decisively.

Generally, a consolidation phase denotes the placement of longs by the market participants who didn’t capitalize upon the initial rally. Apart from them, those investors place bids, which prefer to enter in an auction after a bullish bias sets in.

The asset is comfortably holding above the 50-period Exponential Moving Average (EMA), which is trading at 129.18. The Relative Strength Index (RSI) (14) has shifted its trading range from 60.00-80.00 to 40.00-80.00, which indicates consolidation but overstepping above 60.00 will strengthen the bulls further.

Bulls are paying attention to 200-EMA at 129.43, as a violation of the same will activate buyers and the cross will march towards Thursday’s high at 130.00 and Wednesday’s average traded price around 130.40.

On the flip side, bulls can lose grip below Friday’s low at 129.13 towards 61.8% Fibonacci retracement (placed between Thursday’s low at 127.92) at 128.62, followed by Thursday’s low at 127.92.

EURJPY Will Experience Further Downside Losses

Feb 27 2022