EUR/JPY long-term technical analysis
EUR/JPY is in a sideways situation in November even though it closed up at the end of the month. The pair starts the month by falling to as low as 131.38 before reversing up to reach 131.95 in the middle of the month. The buying stopped and made a bearish turn to reach as low as 131.15 before turning up again and closed the month at 133.93.
There is a major shift in sentiment from Japan side. BOJ announced possible normalization to its aggressive monetary policy. The normalization means Japanese Yen might switch from its bearish sentiment and start charging when the announcement official.
Currently, EUR/JPY is on the path lower after four days lower close. The pair traded at 132.40 and might reach the bottom of the range at 131.15 in a matter of days/weeks.
Click here to see previous month EUR/JPY long-term technical analysis November 2017
EUR/JPY gained in November and the pair move inside 133.50 – 135.00 area. However, the upward movement encounters another resistance, and the bear pulled the bull away from the area in December. Traders will expect the pair continue sideway movement near the resistance.
EUR/JPY continue the sideways movement on the weekly chart. Traders could assume the pair will come to the bottom of range 131.15 (Lowest low in the range). Observing the chart, the pair never made a close below 131.80 and traders could look for long position between 131.15 – 131.80 with stop order 20-30 pips below 131.15.
The situation of EUR/JPY on the daily chart tells the same story as its weekly and monthly chart. Traders could use the moment to trade the range.
Long position from the bottom of the range shown on all EUR/JPY chart between 131.15 – 131.80 is a high probability (Ignoring fundamental). Conservative traders will wait for the formation of the bullish pattern before placing position.
A short position could be taken from the top of the range between 133.50 – 134.50.