EUR/JPY: technical analysis 10.01.20
On the 4-hour chart, the instrument keeps a moderate positive dynamic. We can see slightly overbought conditions of Stochastic, but the general upward trend still maintains. At the moment the price has met the resistance at the level of 121.720. If the "bulls" manage to raise the rate above this level, the growth can continue to the area of 121.875 resistance. The area of 121.875-122.007 seems a strong resistance zone that can activate a downward reverse of the price. Meanwhile, the breakout of 122.007 can trigger the pair’s active run-up to the 122.266 resistance.
The pullback below 121.484 support will be a sign for downward correction formation and let the price decline to the 121.220 support. One may speak about downward movement continuation after the price consolidates below the support level of 121.094. In this case, the next targets of sellers will be the level of 120.703.
Technical indicators mostly keep a buy signal, but the downward correction is possible in the short term.
Bollinger Bands are diverging on the background of bullish momentum.
MACD is growing in a positive zone.
Stochastic is ready to leave the overbought area and is pointed downwards, reflecting the high possibility of the downward movement formation.
Support and resistance
Support levels: 121.484, 121.220, 121.094, 120.703.
Resistance levels: 121.720, 121.875, 122.007.
Short positions can be opened below the level of 121.484 with the target at around 121.220 and stop-loss at 121.572.
Long positions can be opened above the level of 121.720 with the target at around 122.007 and stop-loss at 121.624.