FX.co ★ EUR/JPY Intraday Technical Analysis

The spot rate broke yesterday the intermediate resistance of its medium term bullish channel at 101.40 and tests now the upper limit of this one at 103.20 suggesting a decline. However, a break of these levels will initiate a more violent bullish channel.

Technical indicators provide sell signals and evolve in overbuy zone supporting the assumption of a decline in a short-term. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in a short-term.

As the spot rate is currently testing the upper limit of its channel, we suggest 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell at the level of 103.20 with the 1st objective at 102.60 and then at 102.40. A breakthrough of 103.40 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 103.20 with the 1st objective at 103.80 and then at 104.00. A breakthrough of 103.00 will invalidate this scenario.