Euro/yen looks for support

EUR/JPY is now trading below the 200-day moving average, looking to go back to previous support located at 137-136.20 (yen).

The 50-day moving average is breaking down to the 200-day moving average, generating the bearish golden cross. While the last bullish move was not so much of a rally, hopefully a return to the previous support area can signal a real bullish move.

A break below support will signal weakness for the currency and the euro will remain vulnerable to a continued selloff, leading the market to 133.30 and even toward the area of 128-125--cutting the 38.2% Fibonacci of the entire recovery that began in mid-2012.

If a recovery is attempted, we will see the euro find resistance at the 139-139.90 area or potentially at 141.40, from where the downtrend should be resumed--as would be expected.

Only with direct break above the 141.40 can we expect a continuation of the recovery—this being the key obstacle to reach 143.80 in the short- and medium term for the EUR/JPY.

 

 

 

For our Spanish-language readers:

 

El EUR/JPY se encuentra operando debajo de la media de 200 días, buscando regresar a la zona de mínimos previos de 137 yenes primero y 136.20 yenes mas tarde.

La media de 50 días se encuentra cortando a la baja a la media de 200 días, generando el golden cross negativo a la vez que la última suba fue de manera contra-tendencial y por ello es de esperar un regreso a la zona de mínimos previos.

Un quiebre debajo de tales mínimos implicara una señal de debilidad para la divisa y el euro quedara vulnerable a ampliar las perdidas llevando al mercado a los 133.30 yenes e incluso rumbo a la zona de 128-125 yenes, recortando el 38.2% de Fibonacci de toda la suba iniciada a mediados de 2012.

En caso de intentos alcistas, vemos que el euro encuentra resistencia en los 139-139.90 yenes o potencialmente en los 141.40 yenes y desde donde las bajas deberán quedar retomadas, tal como lo proyectado.

Solo con el quiebre directo por encima de los 141.40 yenes, las bajas quedaran postergadas y podremos ver una recuperación mayor, siendo los 143.80 yenes el escollo clave de corto y mediano plazo para el EUR/JPY.

 

 

About the Author
Julian Yosovitch
Julian Yosovitch is a trader, and columnist for Ambito Fiinanciero (Argentina), Gestion (Peru), Saladeinversion.com, Inversion and Finanzas (Spain).
He holds a Bachelor of Business Administration and a Professor Master in Finance (UDESA). He is also a Capital Markets Specialist (UBA-IAMC) and Financial Markets Analyst - Ruarte´s Reports Trader. Follow his blogs here, and folow him on Twitter @julianyosovitch.
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