Technical Update - USDJPY and EURJPY: Potential Resurgence Despite Recent Sell-offs Technical Update - USDJPY and EURJPY: Potential Resurgence Despite Recent Sell-offs Technical Update - USDJPY and EURJPY: Potential Resurgence Despite Recent Sell-offs

Technical Update - USDJPY and EURJPY: Potential Resurgence Despite Recent Sell-offs

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

USDJPY was hit by heavy selling just before reaching the 0.618 retracement of the end-April sell-off at 157.05. A correction has taken the pair down to the 0.618 of the rebound that followed at 153.74.

The strength indicator RSI is still showing positive sentiment with no divergence, indicating USDJPY is likely to resume its bullish trend with upside potential to 158.46. If USDJPY drops below this morning's lows at 153.60, it could fall to the 0.786 retracement at 152.91. The 55 daily moving average is rising just below and is adding to the support.

If USDJPY closes below 151.85, the entire bullish trend has reversed.

Source all charts and data: Saxo Group

EURJPY, after breaking above the 0.618 retracement, was hit by heavy selling at 169.40, which seems to be strong resistance. EURJPY has found support at the 0.382 retracement at 167.35 and could very well resume its uptrend.

RSI is still showing positive sentiment with no divergence, supporting higher EURJPY levels than 169.40.

A break below 167.35 is likely to fuel another sell-off down to the 0.618 retracement

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