EUR/JPY Forecast: Weekly Analysis and Predictions – Action Forex
The EUR/JPY pair experienced a decline from 163.86 last week, extending even further before stabilizing at 155.45. This sideways movement has left the initial bias for the pair neutral as we look ahead to the upcoming trading week. The outlook for EUR/JPY remains cautiously bearish as long as the key 160.01 support turned resistance level holds. A break below 155.45 could potentially lead to a retest of the 154.40 low, with a firm break indicating a continuation of the decline towards the 153.15 support level, and possibly even further down to the 152.11 fibonacci level.
Technical Analysis and Overview
From a technical perspective, the price action for EUR/JPY from 175.41 is viewed as a correction to the rally from the 114.42 low in 2020. The consolidation range is believed to be set between the 38.2% retracement level of 152.11 and the high of 175.41. However, a decisive break below the 152.11 level could suggest that a deeper correction is currently in progress.
Long-Term Outlook and Potential Trends
Looking at the long-term picture, there are indications of a bearish divergence in the W MACD, suggesting that 175.41 may have served as at least a medium-term top for the EUR/JPY pair. While it may be premature to conclude that the uptrend from the 94.11 low in 2012 has come to a close, there is a likelihood of a medium-term corrective phase underway, with the potential for a deeper decline back towards the 55 M EMA, currently situated at 145.95.
It is essential for traders and investors to monitor key support and resistance levels closely, as well as pay attention to any significant technical indicators that could signal a shift in market sentiment for the EUR/JPY pair. As geopolitical events and economic data continue to influence currency movements, it is crucial to stay informed and adapt trading strategies accordingly to navigate the dynamic forex market effectively.
