EUR/JPY Price Analysis: Remains bearish after posting recovery from three-week low

Source Fxstreet
Mar 7, 2024 22:50
  • EUR/JPY bounces from three-week low to 161.96, forming a 'hammer' pattern suggesting potential upside.
  • Mixed technical indicators prompt caution, with the RSI nearing a bearish shift as the pair eyes the 162.04 Tenkan-Sen.
  • Bears and bulls vie for control, with critical supports and resistances set around key psychological and technical marks.

On Thursday, the EUR/JPY registered a volatile session that saw the pair dive to a three-week low of 160.55. However, the losses were short-lived amidst the ECB’s hawkish hold, and the session finished with losses of 0.43%. As the Friday Asian session begins, the cross trades at 161.96, down 0.10%.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY formed a 230 pip ‘hammer,’ which indicates the pair is edged to the upside. However, mixed signals between price action and the Relative Strength Index (RSI) are closing to the 50-midline about to shift bearish, suggesting caution is warranted.

On the upside, the pair is capped by the Tenkan-Sen at 162.04, which, once cleared, could open the door to testing the March 7 high at 162.81, followed by the psychological 163.00 mark. Nevertheless, should bears keep the EUR/JPY from climbing above 162.00, the pair could extend its losses.

The first support would be the Senkou Span A at 161.67, followed by the Kijun-Sen at 161.31. Once surpassed, the 160.55 March 7 low emerges as the demand area, followed by 160.00.

EUR/JPY Price Action – Daily Chart

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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