Wednesday, January 03, 2018

An EUR/JPY Drop Is Possible

 On the W1 time frame the EUR/JPY pair has formed an RSI divergence which is a signal for a possible depreciation.

On the same time frame the pair has reached a strong resistance level at 135.50 and on the D1 time frame it is also testing the same level. I think that the small spinning top bars forming below the resistance on the D1 time frame are a signal for a possible move to the downside.

 Тhe support levels on the way down are at 134.50 and at  134.00, with the second support being quite strong. If the pair breaks out below it I think it will continue depreciating to 132.50.

However, I also think that it will be difficult for the pair to overcome the support at 134.00 and that at that level it will renew its rally to the next resistance zone around 138.00 – 138.50.