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Japanese yen slides against the US dollar and euro

USD/JPY has bounced off the recent low, but resistance may lie ahead; EUR/JPY appears to be caught in a descending trend despite the recent rally and if the Yen weakening picks up, will USD/JPY and EUR/JPY make historic highs?

USD/JPY

USD/JPY made a two-month low last week at 130.40 and the move went below several support levels in the 131.25 – 131.50 area.

The price was unable to close below these levels and was not able to sustain the push lower. This could be viewed as a rejection of the break lower and that area could provide support if tested again.

On that move, it went below the lower band of the 21-day simple moving average (SMA) based Bollinger Band. Once it closed back inside the band, it rallied toward the break point of 135.57, but was unable to overcome it and it may continue t offer resistance.

The widening of the bands themselves indicates an increase in volatility in the recent price action.

Just above there, the 61.8% Fibonacci retracement level of the move from the 24-year high at 139.39 to last weeks low of 130.40 is at 135.95. It might offer resistance as well as the late July peak of 137.46 that has a descending trend line currently intersecting near it.

USD/JPY chart

EUR/JPY

EUR/JPY made a three-month low last week at 133.40, which is just above a break point of 133.15 and the May low of 132.66. These levels may provide support if tested again.

The price remains in an overall descending trend channel and is below all period simple moving averages (SMA) with the exception of the ten-day SMA. This may suggest that there is a pause in bearish momentum, but that underlying medium and long-term bearish momentum may still be evolving.

The 21- and 100-day SMAs are currently clustered in the 138.00 – 138.20 zone and might offer resistance. The break point at 141.41 and the mid-July peak of 143.12 may also offer resistance.

Further up, the triple top at the seven-year high of 144.28 could offer resistance.

EUR/JPY chart

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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