EURJPY Continues Its Ranging Pattern in Its Bullish Flag Formation


EURJPY Price Analysis – January 21

EURJPY continues its ranging pattern in its bullish flag formation. The market has been cranking through a descending channel and that is set to continue. The price has turned downward after reaching the upper border of the descending channel. Shortly before the drop, the market had struggled to hold above the 130.690 price level. If this had been successful, EURJPY would have tried to force itself out of the pattern. But as it is now, the price is dropping.

EURJPY Significant Levels

Resistance Levels: 134.150, 130.690
Support Levels: 127.630, 125.420

EURJPY Continues Its Ranging Pattern in Its Bullish Flag FormationEURJPY Long Term Trend: Bullish

Price formed the bullish flag after it broke out of a bigger triangle pattern on December 2021. The combination of these patterns signifies the bullish strength in the market. EURJPY stopped short of an upsurge at the 134.150 significant level. From here, the price started cranking downward via the descending channel of the bullish flag. After striking the upper border, the price continues its undulation cycle by dropping to the lower border.

On the daily chart, the MA (Moving Average) Cross has now crossed downward just below 130.690 to signal the drop in the market. The RSI (Relative Strength Index) indicator can be seen plunging below the midway line into a bearish zone. These indicators confirm that the price is finishing its current cycle. The market is expected to rise again towards the upper border to break it.

EURJPY Continues Its Ranging Pattern in Its Bullish Flag FormationEURJPY Short Term Trend: Bearish

The current bearish nature of the market is well pronounced on the daily chart as well as the 4-hour chart. The Moving Averages periods 9 and 21 are lying on the 4-hour candles, applying downward pressure. Meanwhile, the RSI line has touched down on the oversold border. The price is expected to reverse at the 126.630 price line or below it.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.