EUR/JPY Heads to 61.8% Retracement – Buckle Up for Trade
Arslan Butt • 1 min read
It’s been a good trade in GBP/JPY as the forex trading signal has already closed in profit due to strengthening Japanese yen. Likewise, EUR/JPY is also forming a strong bearish setup on the 2-hour timeframe.
Taking a look at the chart, EUR/JPY entered the overbought zone to trade around 121.100 area after the ECB left interest rates unchanged. For now, investors are taking profits in EUR/JPY and retracement is likely to be completed around 120.600, which marks the 61.8% level.
Japanese yen is getting strong as the Bank of Japan isn’t expected to cut the interest rates in this policy meeting. While there are strong sentiments that the Federal Reserve will cut the interest rates by 25 base points. So in that scenario, Japanese yen remains one of the safest currencies to invest in.
- EUR/JPY is facing immediate support at 120.800, and the violation of this can extend bearish rally until 120.600 and 120.450.
- The 50 and 100 periods moving averages are suggesting bearish trend while providing resistance at 120.900.
- The RSI and Stochastics have also crossed below 50, in fact holding around 20, suggesting a bearish bias among traders.
EUR/JPY – Trade Idea
Considering the technical aspects, we may have a chance to capture a sell position in EUR/JPY. Therefore, we have opened a sell trade below 120.830 with a stop loss above 121.10 and take profit of around 120.550.