EUR/JPY Bounces in a Range as the Trend’s Direction Is Unknown

Key Resistance Levels: 160.00, 162.00, 164.00
Key Support Levels: 150.00, 148.00, 146.00

EUR/JPY Price Long-term Trend: Bearish
The EUR/JPY pair has been fluctuating within a range since its price drop on August 31 as the trend’s direction is unknown. The currency pair has been bouncing back and forth between 157.00 and 158.50 levels. In other words, the moving average lines have trapped the Yen.

For the previous month, the value of the Yen has been constant within a range. Currently, the EUR/JPY exchange rate is 157.75 as of this writing. As the Yen continues to range between the moving average lines, the market’s direction is unclear.

For instance, if the price breaks over the 21-day SMA, the Yen will resume its bullish trend. The Yen will increase to its prior peak level of 159.76. If the price falls below the 50-day SMA, the situation will be the opposite. Market prices will drop till they reach the previous low at level 154.00.

Daily Chart Indicators Reading:
The Yen is in the bearish trend zone at level 48 of the Relative Strength Index for period 14. It can degenerate further. The Yen will keep trading sideways as it is trapped between the moving average lines. The moving average lines have a horizontal slope.

EUR/JPY Medium-term Trend: Ranging
The currency pair is moving in a narrow range in a sideways trend. The barrier at level 158.50 is impeding upward movement. As it gets closer to the present support at level 157.00, the Yen is falling. Every time the currency pair retests the level 157.00 support level, a bounce will occur. The market’s current support level is oversold.

4–Hour Chart Indicators Reading:
The horizontal flatness of the moving average lines indicates a sideways tendency. Below the daily Stochastic threshold of 40, the Yen is experiencing a bearish momentum. As the market moves closer to the oversold area, the bearish momentum has paused.

General Outlook for EUR/JPY
The Yen entered a sideways pattern after the prior uptrend as the trend’s direction is unknown. In a range between levels 157.00 and 158.50, the currency pair is trading. The combination has not trended over the past month.

The current trajectory of the trend is not known. When the range-bound levels are crossed, the pair will trend.

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