EUR/JPY: technical analysis 16.10.2019

Current trend

EUR/JPY is in the stage of downward correction after raising to the level of 120.220. If the sellers manage to decline the rate below the level of 119.740, the correction can continue to the area of 119.531, which coincided with the middle line of Bollinger Bands. This area can prevent the instrument from falling as the possibility of the reverse of the price is high there. Meanwhile, the breakdown and pair’s sustained trading below the 119.531 would be a signal for downtrend formation. In this case, the next targets of sellers will be the level of 119.102.
Alternative scenario.
One may speak about upward movement continuation after the price consolidates above the resistance level of 120.125. In this case, the buyers will try to retest the resistace area 120.220. We notice, the area of 120.220-120.313 seem a strong resistance area, which can activate an downward rebound.
Meanwhile, decisive break of 120.313 level will indicate the up trend resumption and give the prospect of growth to the levels of 120.514-120.706. Technical indicators mostly keep a buy signal, but the downward correction is possible in the short term. Bollinger Bands are pointed upwards. MACD is growing in the positive zone. Stochastic has left the overbought area and is pointed downwards, reflecting the high possibility of the downward movement formation.

Support and resistance

Support levels: 119.740, 119.531, 119.102.
Resistance levels: 120.220, 120.313, 120.514.

Trading recommendations

Short positions can be opened below the level of 119.740 with the target at around 119.531 and stop loss at 119.810.
Long positions can be opened above the level of 120.220 with the target at around 120.313-120.514 and stop loss at 120.122.

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