Valeria Bednarik, chief analyst at FXStreet explained that the EUR/JPY pair closed the week with gains at 125.35, having erased all of the previous week losses, but still trading with a heavy tone and below the 126.00 level, in where the pair bottomed in 2015.
Key Quotes:
“The Japanese yen maintained a neutral stance against the greenback, unable to rally as risk aversion eased somehow on new Chinese easing measures, which means the advance was mostly led by EUR gains and therefore, further gains will depend on whatever the ECB decides this Thursday. From a technical point of view, the daily chart shows that the technical indicators maintain their bullish tone within bearish territory, coming from extreme oversold readings and far below the 100 SMA, currently around 129.70, all of which suggests the recovery has been long-term corrective.
In the 4 hours chart, the price stands a few pips above the 100 SMA, and the Momentum indicator heads north above its 100 line, but the RSI indicator is beginning to retreat from overbought levels, which can limit the upside and suggest further slides, particularly if the pair losses the 125.00 level.”
(Market News Provided by FXstreet)