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Home ANALYSIS

EURJPY tried to break 100 hour MA today on the corrective move, but found buyers instead

A.R Chowdhury by A.R Chowdhury
March 30, 2022
Reading Time: 5 mins read
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EURJPY tried to break 100 hour MA today on the corrective move, but found buyers instead

EURJPY

EURJPY fell down to test its 100 hour moving average

The  EURJPY 
EUR/JPY

The EUR/JPY is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the Japanese yen of Japan (symbol ¥, code JPY).  The pair’s rate indicates how many Japanese yen are needed in order to purchase one euro. For example, when the EUR/JPY is trading at 125.00, it means 1 euro is equivalent to 125 Japanese yen. The euro (EUR) is the world’s second most traded currency, whilst the Japanese yen (JPY) is the world’s third most traded currency, resulting in an extremely liquid pair. Why the EUR/JPY Remains an Attractive Option for TradersWhilst the spreads of currency pairs vary from broker to broker, generally speaking the EUR/JPY often stays within the 1 pip to 3 pip spread range. The EUR/JPY is one of a select few pairs which have a low spread yet decent daily range.  Important news announcements for this pair include the Consumer Price Index (CPI) for the Eurozone. Releases such as these give an idea of changes in the price of goods and services, and the Jobless Rate for Japan, which measures the percentage of unemployed in the country.For example, if this figure comes out as a lower percentage, it indicates strength in the Japanese economy, thereby pushing the EUR/JPY lower. Out of all the JPY pairs, it is the EUR/JPY that is arguably the most attractive to the broad spectrum of traders, regardless of their method of trading. Its low spread plus high volatility makes it a great candidate for both short- and long-term trading. Compared to the USD/JPY, it has a higher spread but higher range, whereas compared to the GBP/JPY, it has a lower spread but also a lower range. In this sense the EUR/JPY combines the best of both worlds, which explains part of its appeal

The EUR/JPY is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the Japanese yen of Japan (symbol ¥, code JPY).  The pair’s rate indicates how many Japanese yen are needed in order to purchase one euro. For example, when the EUR/JPY is trading at 125.00, it means 1 euro is equivalent to 125 Japanese yen. The euro (EUR) is the world’s second most traded currency, whilst the Japanese yen (JPY) is the world’s third most traded currency, resulting in an extremely liquid pair. Why the EUR/JPY Remains an Attractive Option for TradersWhilst the spreads of currency pairs vary from broker to broker, generally speaking the EUR/JPY often stays within the 1 pip to 3 pip spread range. The EUR/JPY is one of a select few pairs which have a low spread yet decent daily range.  Important news announcements for this pair include the Consumer Price Index (CPI) for the Eurozone. Releases such as these give an idea of changes in the price of goods and services, and the Jobless Rate for Japan, which measures the percentage of unemployed in the country.For example, if this figure comes out as a lower percentage, it indicates strength in the Japanese economy, thereby pushing the EUR/JPY lower. Out of all the JPY pairs, it is the EUR/JPY that is arguably the most attractive to the broad spectrum of traders, regardless of their method of trading. Its low spread plus high volatility makes it a great candidate for both short- and long-term trading. Compared to the USD/JPY, it has a higher spread but higher range, whereas compared to the GBP/JPY, it has a lower spread but also a lower range. In this sense the EUR/JPY combines the best of both worlds, which explains part of its appeal
Read this Term
has been trending to the upside since bottoming on March 7 at 124.374. The pair peaked on Monday at 137.53 for a gain of 1315 pips over the course of 16 trading days.

Since then, the price has traded up and down. Yesterday did close marginally higher. Today is marginally lower but off its low levels.

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The move to the downside in the Asian session tested its rising 100 hour moving average (blue line in the chart above). The price did briefly dip below the moving average, but quickly rebounded, and has been able to stay above that moving average since that test.

Note also that the low today stayed above the high from Friday’s trade near 134.736.

The current 100 hour moving averages at 135.293 and the current price is at 135.939.

In the short term, the price action over the last three days has been able to give the sellers some moderates comfort comfort. Specifically, the last two days as seen lower highs versus Monday’s high. It’s a start.

However, there still is a battle going on between the buyers and sellers at the high levels. It would take a move below the 100 hour moving average (at the minimum) to tilt the bias more to the downside. Until then, the trend to the upside remains the more dominant bias.

What does the technical picture look like looking further out on the weekly chart?

Although longs remain the dominant bias, looking at the weekly chart below, traders can better understand the reluctance at the highs this week.

Going back over time, the run to new highs this week stalled right near the high price from 2018 at 137.497. The high price on Monday reached 137.53 just a few pips above that swing high (that high now represent the new high going back to 2015).

Going forward, just like getting below the 100 hour MA is needed to give the sellers more control, getting above the 137.50 level (and staying above) is needed to increase the bullish bias. On a break, the next target on the weekly chart would come in at 138.98 (call at 139.00).Above that and traders would target 141.047 level (call it 141.00).

EURJPY

EURJPY stalled right near the 2018 high price at 137.50

So buyers are still more in control given the trend move higher, but there is longer term resistance that is also giving sellers some comfort.

The battle lines are drawn. Who will be able to make the next shove?

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A.R Chowdhury

A.R Chowdhury

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