EUR/JPY is cruising higher but appears to be in correction mode while traders brace for the ECB decision.
Are euro bulls hoping to charge again soon?
Check out these potential support levels on the 4-hour chart.
EUR/JPY: 4-hour
EUR/JPY 4-hour Forex Chart Faster With TradingView
The euro has been on a stellar climb for the most part of April, as ECB tightening expectations on war-related cost pressures have picked up.
At the same time, some risk sentiment improvements coming from “cautious optimism” for a diplomatic resolution to the US-Iran war have also weighed on the safe-haven yen.
However, today’s BOJ decision appears to have pared some of the Japanese currency’s weakness, as three hawkish policymakers called for a rate hike while the majority still voted to hold.
Can EUR/JPY find support soon?
EUR/JPY has formed higher lows since mid-February, cruising above an ascending trend line that looks ready for another test.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The Fibonacci retracement tool shows additional levels where buyers could be waiting. The pair is closing in on the 38.2% Fib near the 186.00 major psychological level, while the 50% Fib lines up with S3 (185.20). The 61.8% level could be the line in the sand for a bullish correction since it coincides with the former resistance zone and the trend line support.
Keep your eyes peeled for reversal candlesticks suggesting a bounce at any of these levels, as a continuation of the climb could take EUR/JPY back up to the swing high near R2 (187.85) or at least until the area of interest near the pivot point (186.80).
Long red candles closing below the Fibs and trend line, on the other hand, could point to a reversal from the uptrend. If so, euro bears could set their sights on S5 (184.08) then the swing low around 183.00 next.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
Promoted: Clean Setups Are Easy; Staying Disciplined Isn’t.
EUR/JPY appears to be in correction mode, with nearby Fibonacci levels possibly keeping losses in check. But as any trader learns the hard way, even the best-looking setup can fall apart without the discipline to stick to the plan.
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