EURJPY Technical Analysis

Having defended the 200-day moving average (MA) yesterday, the 27 February EURJPY Technical Analysis shows that the pair is exploring upside above the downward sloping (biased bearish) 5-day moving average in Asia. Will EUR/JPY hold above 132? 

27 February, GKFX – As of writing, the pair is trading at 132.05 and the 5-day MA is seen at 131.79.  The cross looks set to test 200-hour MA of 132.15, courtesy of the bullish relative strength index divergence on the hourly chart, however, the short-term momentum studies – 5-day MA and 10-day MA are trending lower, indicating a bearish setup. So, the pair may find it hard to hold on to gains above the 5-day MA.

That said, the previous two “long-tailed” daily candles signal bearish exhaustion around the 200-day MA (now seen at 131.21). Further, the EUR/JPY one-month 25 delta risk reversals (EUJP1MRR) show the volatility premium for puts (sell EUR) has dropped sharply in the last 15 days. Currently, the risk reversals are being paid at -1.95 EUR puts vs. -2.85 EUR puts on Feb. 12. Hence, the 200-day MA will cap the downside in the pair in the short-run.

Focus on German CPI

German preliminary consumer price index (CPI) figure for February is due at 13:00 GMT. A better-than-expected figure could boost demand for the common currency and vice versa. The pair could also take cues from the broader market sentiment., i.e. risk-on action in the equities could keep EUR/JPY better bid.

27 February EURJPY Technical Analysis

Acceptance above 132.15 (10-day MA) would open doors for a test of supply around 133.00 (zero figure) and 133.06 (Feb. 21 high). On the other hand, a failure to hold above the 5-day MA of 131.79 could yield a re-test of 131.21 (200-day MA) and 130.93 (Feb. 23 low).


This article 27 February EURJPY Technical Analysis was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

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