EUR/JPY rose to daily highs around the level of 132.76, the pricelohhed on June 17. The strong weakness of the Japanese currency pushed it to the strong resistance of +2/8 of murray. This level represents extreme overbought area and an imminent technical correction in the coming days.
The EUR/JPY pair had a strong bullish movement for 7 days and accumulated by more than 400 pips. So it may close the week near the resistance level of 132.81, and next week a technical correction is expected until the SMA of 21 located at 131.50.
This upward movement of this pair can be explained by the fact that in recent days the US dollar strengthened and the Yen lost its attractiveness as a safe haven. Although the euro also fell, against the yen it showed its strength and good performance.
In the broader scenario, as long as the EUR/ PY trades above the 200 EMA at 129.86, the outlook for the cross is expected to remain bullish. And in the medium term, it could reach up to 135.00, the price level of February 2018.
Meanwhile in the short term, our forecast is to continue buying this pair, but first we must wait for a technical correction towards the support of the bullish channel around 131.50.
The key is to sell below 132.81 (+2/8 of murray), while trading below this level, our bearish strategy could work, and the take profit can be located at 131.50. If this level is broken it will be expecting a drop to the 200 EMA at 129.86.
The technical reading of the eagle indicator shows that the pair reached 95 points which represents an imminent downward correction in the next few hours. So you can sell the pair below 132.81. If it consolidates above of 133.00, we should avoid selling.
Support and Resistance Levels on October 15 - 18, 2021
Resistance (3) 133,20
Resistance (2) 133,00
Resistance (1) 132,81
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Support (1) 132,24
Support (2) 132,03
Support (3) 131,61
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A trading tip for EUR/JPY on October 15 - 18, 2021
Sell below 132,81 (+2/8) with take profit at 132,24 and 131,50 (SMA 21), and stop loss above 133,20.