EUR/GBP and EUR/JPY Technical Forecast
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EUR/JPY, EUR/GBP – Stubborn Levels
Since Sep 26, EUR/GBP sellers has been failing to overtake 0.8852, showing lack of momentum to keep leading the price lower. Consequently, buyers took the initiative and pushed the price to its highest level in nearly three weeks. This week the pair continued its rally reflecting the bullish outlook of the market.
On the other hand, since Sep 13 EUR/JPY buyers has been failing at 119.78 and this concluded with sellers taking charge and pressing the pair lower.
At the start of this week, the Relative Strength Index (RSI) crossed above 50 on EURGBP highlighting the end of the downtrend momentum. Meanwhile, the oscillator rose from 40 to 48 indicating to the weakness of the downtrend momentum.
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EUR/GBP Daily PRice CHART (SEP 23, 2017 – OCt 9, 2019) Zoomed Out
EUR/GBP Daily Price CHART (June 19 – Oct 9, 2019) Zoomed in
Looking at the daily chart, we notice on Sep 20 EUR/GBP corrected higher creating a higher low with a higher high. Yesterday, the price rebounded nearby the high end of current trading zone 0.8890 – 0.8995. Hence, any close above this threshold could see the price rallying towards 0.9051. Although, the weekly resistance levels underlined on the chart (zoomed in) should be considered.
On the flip-side, another failure in closing above the high end of the zone could reverse the pair’s direction sending it towards the low end. Further close below 0.8880 could press EURGBP towards 0.8852.
See the chart to know more about trading zone/s with the key technical levels the price would encounter in a further bullish/bearish scenario.
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EUR/JPY Daily PRice CHART (April 15, 2017– OCt 9, 2019) Zoomed Out
EUR/JPY Daily PRice CHART (June 28 –Oct 9, 2019) Zoomed In
From the daily chart, we notice on Sep 3 EUR/JPY U- turned and rallied towards 120.00 handle. The price then started a sideways move and created a lower high at 118.47. Since Oct 2, sellers have been testing the low end of current trading zone 117.30 – 119.78 However, showing lack of momentum in forcing a clear close below this threshold.
Thus, a close above the low end of the zone could cause a continuation of the trendless move i.e. rally EURJPY towards the high end, contingent on clearing the daily resistance level underscored on the chart (zoomed in).
That said, a close below the low end of the zone may see EURJPY trading towards the vicinity of 114.95-80. In that scenario, the weekly support area and level marked on the chart should be watched closely.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi