Euro technical outlook: EUR/USD and EUR/JPY are seeing different set-ups
EUR/USD has tumbled from a ten-month peak seen earlier this month; EUR/JPY has consolidated near two-month highs with potential momentum building and if the US dollar continues to gain, how low will EUR/USD go?
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EUR/USD technical analysis
EUR/USD made a ten-month high at the start of this month before retracing lower in sync with broad-based US Dollar support.
That move down saw the price break below an ascending trend line but despite the slide, EUR/USD remains in a bigger picture ascending trend channel
The 100-, 200- and 260-day simple moving averages (SMA) remain below the price while the 10-, 21-, 34 and 55-day SMAs are above the price. This may indicate that long-term bullish momentum might be intact for now, but short and medium-term momentum could be bearish.
The 100- and 260-day SMAs are near the prior lows of 1.0443 and 1.0483 and this may set up a support zone. Further down, the ascending trend line is near the 200-day SMA near 1.0330 and is a potential support level.
Under there, the prior lows and breakpoints at 1.0290, 1.0223, 1.0198 and 1.0094 may provide support.
Above the price, the 21-day SMA is close to crossing below the 55-day SMA. If this occurs, it will signal a Death Cross and could suggest that bearish momentum may unfold.
The 34-day SMA is near the breakpoint of 1.0766 and may offer resistance ahead of the previous peak and breakpoint near 1.0805.
EUR/USD daily chart
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EUR/JPY technical analysis
The Japanese yen has depreciated against the EUR of late after EUR/JPY broke above the Ichimoku Kinko Hyo, which is often referred to as the Ichimoku Cloud.
Two weeks ago, the price moved above the Senkou Span A (Leading Span A) and the Senkou Span B (Leading Span B) to potentially indicate that bullish momentum could unfold.
Stepping back, there could also be a potential bullish Pennant Formation evolving with a descending trendline above the price and an ascending trendline below the price. These trendlines may offer resistance and support respectively before a possible breakout.
Resistance might be at the prior peaks of 144.16, 146.73, 147.11, 147.72 and 14840. On the downside, support could be at the previous lows of 142.16, 136.55, 137.92 and the Double Bottom at 137.37.
EUR/JPY daily chart
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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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