EURJPY has formed lower highs and higher lows, creating a symmetrical triangle formation visible on its 4-hour time frame. Price just bounced off the resistance and is on its way to testing support at the 124.00 major psychological mark.
The 100 SMA is above the longer-term 200 SMA on this time frame so it’s more likely for support to hold than to break. Also, the 100 SMA appears to be holding as dynamic support at the moment.
Stochastic is indicating oversold conditions, which means that sellers might book profits soon and let buyers take over. Once the oscillator pulls up from the oversold area, buying pressure could take price back up to the resistance at 125.00.
Most euro zone banks have been closed in observance of Whit Monday and data has been less upbeat than usual. These are just the final services PMI readings from the top economies, though, and the bigger event risk is likely the ECB statement due later this week.
As for the yen, the Japanese currency has gained some support from a weaker dollar when the US NFP disappointed last week. Japanese average cash earnings data is due next and a 0.3% increase is eyed.
By Kate Curtis from Trader’s Way