Japanese technical: yen scopes new lows against US dollar but consolidates against euro

USD/JPY

USD/JPY (大口） continues to press higher, making a fresh 24-year high last week at 139.39. The trend of higher highs and higher lows continues, and the price has bumped up against an ascending trend line.

With the price above all short, medium and long term simple moving averages (SMA), bullish momentum appears to remain intact for now. Supporting this perspective is the positive gradients of all SMAs.

A potential headwind could be the price action around 21-day simple moving average (SMA) based Bollinger Band. The peak on Thursday moved above the upper band and it closed outside it. It has since closed back inside the band, and this might indicate a pause in bullishness and possibly a near term reversal.

Support might be provided at the recent lows of 136.48, 134.75 and 134.27, or further below at a potential support zone of 131.25 - 131.50, where there are two break points and a previous low.

Resistance could be at that recent peak of 139.39 or the ascending trend line, currently at 139.50.

EUR/JPY

After breaking the topside of a Pennant Formation at the end of May, EUR/JPY went on to make a seven-year high at 144.25 in quick step.

Since that breakout, it has been in a 136.87 – 144.25 range. The lack of directional momentum is illustrated by the differing gradients of different time period simple moving averages (SMA).

The peak at the start of June has since been tested a number of times, but it has not been overcome and it may continue to offer resistance. Below that, the break points of 141.40 and 142.37 could offer resistance.

On the downside, the recent low pulled up just shy of a break point at 136.79 and the area of 136.79 – 136.87 might provide a support zone. The 100-day SMA lies just below there, currently at 136.58.

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