Currency Pair: EUR/JPY
Chart: 15 Min Charts
Short-Term Bias: Long
UPDATE
The EUR/JPY continues to trade within the channel, with the short-term corrections coming into play. However, current price action has yet to meet our expectations for the currency pair to test 161.69 (21.4 Fib level) for resistance, but looks to be finding support at 161.0. The currency pair remains range-bound between 161.5 and 161.0, and continues to hold near the lower channel.
A bullish divergence from the RSI could create some trading opportunities for us in the near future, and we continue to hold a bullish outlook for the EUR/JPY. We expect price action to retrace back towards the top of the channel, and forecast 161.69 (21.4 Fib level) as the key resistance level for the pair. If the EUR/JPY does in fact break above 161.69, it may have the potential to rally up to 161.9. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
The EUR/JPY has lost momentum after making a run for 170.0 in early August, and has taken a steep fall in the past few weeks. After peaking to the top of the channel on August 15th, the EUR/JPY dipped below the lower channel in the last 24 hours, and looks to have found support at 161.0.
We forecast the EUR/JPY to move within the channel, but a short-term correction looks to be in the works as the pair works it way back up from the bottom of the channel. We expect the downtrend to hold in the long-term, but the oversold signal illustrated in the RSI provides confirmation that the pair could be making its way back to the top of the channel. For the remainder of the trading session, we expect the EUR/JPY correction to unfold, and may test for resistance at 161.69 (21.4 Fib level).
