Technical analysis of EUR/JPY for November 15, 2017

The strength in EUR has pushed the EURJPY to new short-term highs after successfully testing and respecting support at 131.50-131.30 area. The long-term technical and cloud support were held, the price is bouncing strongly now in an upward move that could provide new highs towards 135.

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Red line - long-term support

The EURJPY has been mainly moving sideways for the last two months between 134.60 and 131.40. This is the 4th time price has reached the red trend line support and bounced strongly. This time might be different and we might not see a rejection at the 134.60 level. Price movement looks impulsive. Key support for bulls is at 131.80-132.30. Breaking into this area will increase the chances of breaking below 131.40.

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Blue lines - bullish channel

Red line - horizontal support trend line

On a daily basis, we see EURJPY having broken out and below the bullish channel. Price was making new highs but the RSI was diverging. This does not cancel the scenario for a new higher high towards 135 before a bigger scale reversal. However, if the price back tests the resistance of the broken channel at 134.30 and gets rejected, we could then see an ugly downward reversal. Long-term view keeps a close eye on 131.60-131.40 trend line and cloud support. Breaking it will push price towards 127 at least.

The material has been provided by InstaForex Company - www.instaforex.com