EUR/JPY: technical analysis 20.01.20

Current trend

On the 4-hour chart, the instrument is correcting up from the lower line of the Bollinger Bands (122.102) and is testing the resistance 122.266. The area of 122.266-122.305 can activate a downward reverse of the price, while its breakout will give a prospect of growth to the 122.474 resistance. This level is coincided with the middle line of Bollinger Bands and seems a key target of the upward correction. The decisive break of 122.474 is needed to indicate the upward trend resumption. In this case, the next targets of buyers will be the area of levels 122.656-122.820.

Alternative scenario

The downward rebound from 122.266 and pullback below 122.102 will be a signal for downward trend resumption and let the price decline to the 121.875 support. This level will be a key sellers' target for the short-term period. There is a high chance of an upward rebound. However, the decisive breakdown of 121.875 can accelerate the pair towards 121.600- 121.484 support line.

Technical indicators

Technical indicators mostly keep a sell signal, but the upward correction is possible in the short term.

Bollinger Bands are pointed downwards.

MACD volumes are decreasing in the positive zone.

Stochastic has left the oversold area and is pointed upwards, reflecting the high possibility of upward movement formation.

Support and resistance

Support levels: 122.102, 121.875, 121.600, 121.484.
Resistance levels: 122.266, 122.474, 122.656, 122.820.

Trading recommendations

Short positions can be opened below the level of 122.102 with the target at around 121.875 and stop-loss at 122.177.
Long positions can be opened above the level of 122.266 with the target at around 122.474 and stop-loss at 122.190.

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