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EUR/JPY: technical analysis 07.01.20

Current trend

On the 4-hour chart, the instrument keeps a positive dynamic. The price is approaching a strong resistance in the region of 121.484. Assuming the pair’s ability to cross this level, the mark of 121.875 can be targeted if holding long positions. For the short-term period, this level seems a strong resistance that can activate a downward rebound.

Alternative scenario

The downward rebound from 121.484 resistance and pullback below 121.289 will be a sign of downward correction formation and let the price decline to 121.094 support. This level is coincided with the middle line of Bollinger bands and can be a main target of the potential downward correction. There is a high chance of an upward rebound, while its breakdown would allow the fall to continue to the area of 120.703 support.

Technical indicators

Technical indicators reflect the moderate maintenance of the current upward trend.

Bollinger Bands are converging on the background of bullish momentum.

MACD volumes are decreasing in the negative zone.

Stochastic is in the overbought area and is pointed sideways.

Support and resistance

Support levels: 121.289, 121.094, 120.703.
Resistance levels: 121.484, 121.875, 122.266.

Trading recommendations

Short positions can be opened below the level of 121.094 with the target at around 120.703 and stop-loss at 121.220.
Long positions can be opened above the level of 121.484 with the target at around 121.875 and stop-loss at 121.353.

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