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Follow up on EUR/JPY

Yesterday we saw that the EUR/JPY had reached the 55 day exponential moving average, purple line, which is currently around the 120.81 level. We noticed that the candle that formed on the 55 day EMA is a doji or a spinning top, indicating that the drop on the pair may have lost its strength. On the following candle we see that the pair bounces to the upside and reaches the 122.00 level, which is currently acting as resistance. If the price continues rallying, then the pair will enter the congestion area between the 122.00 and the 124.00 levels. In case the pair comes back down, then the same 55 day EMA may act as support. But below the 55 day EMA, we can see that the 120.00 level or the 200 day EMA, blue line, could also act as support.

The EUR/JPY could have reached a support area

The EUR/JPY was in a well-defined range between the 122.00 level as support and the 124.00 level as resistance. But during the last few sessions the bearish momentum has accelerated and the pair has broken below the 122.00 level to reach the 55 day EMA, around the 120.81 level. The last daily candle is a doji, which means that the bearish momentum has lost its strength and the pair may try to bounce to the upside. In case of a bullish pullback, the 122.00 level may act as resistance. To the downside, the 120.00 level may act as support, followed by the 119.00 level where we can also find the 200 day EMA.

The USD/JPY accelerates is bearish momentum

The USD/JPY had found a good support zone around the 114.00 level, where the 55 day EMA is close by. A few days back we noticed that the highs of the daily candles have been lower than the previous ones, showing us that the bearish pressure was accumulating. During today’s session, the USD/JPY breaks the 114.00 level and accelerates its bearish momentum. At the moment, the 113.00 level could act as a temporary support, but it seems like it wants to go and visit the 112.00 level. Below the 112.00 level, the next support area could be the 109.00 zone, where we can also find the 200 day EMA. In case of a bullish pullback, the same 114.00 level could become resistance.

Will the rally on the EUR/GBP expire?

The EUR/GBP has kept a good bullish trend, but once it got above the 0.8700 level, the rally seems to have lost some steam. At the area between the 0.8700 level and the 0.8800, the price may consolidate there, but if it breaks above the 0.8800 level, then the pair has the road clear all the way to the 0.9000 level. To the downside, below the 0.8700 level, the 0.8600 may act as support, along with the 55 day EMA, purple line, which is around the 0.8568 level. Even lower, we can see that the 200 day EMA, blue line, around the 0.8435 level may also act as support. Finally, the most important support on the daily chart is the round number level of the 0.8300.

Consolidation on the EUR/USD

The EUR/USD is consolidating around its 55 day EMA, which is currently just above the 1.0600 level. The pair is really boxed between the 1.0600 and the 1.0700 levels. From the current consolidation, the pair may head in any direction. Even though it seems like the pair is pulling back to the upside, it really has no clear direction due to the high volatility that is has had lately. Above the 1.0700 level, the 1.0800 may act as resistance, but above that level, the most important resistance is at the 1.0900 level, where we can also find the 200 day EMA, blue line. Below the 1.0600 level, the 1.0400 level may act as support. The EUR/USD has already tried to break below the 1.0400 level, but it has not been able to stay below that zone.

Gold reaches the 1200 zone

We have been following the price of gold during the past few days and today we see that it has reached the 1200 zone along with the 55 day EMA, purple line, around the 1194. There is a high probability of seeing a bearish bounce from this area, since we have the 1200 psychological level and the 55 EMA on the area. But if gold breaks above the 1200 level, then it may try to go and visit the 200 day EMA, blue line, which is around the 1234 level. The rally on gold may be due to a bearish retracement on the Dollar, which has raised the demand of the precious metal. To the downside, the most important support is still the low made around the 1122 level on the daily chart.