Having breached the 200-day moving average (MA) of 131.23 earlier today, the 28 February EURJPY Technical Forecast shows that the pair now risks printing a fresh 5.5 month low below Feb. 23 low of 130.93.
28 February, GKFX – The cross was already on the back foot following rejection at the downward sloping (bearish biased) 10-day MA yesterday. The Bank of Japan’s (BOJ) decision to trim the long duration JGB purchases today only added to the bearish pressure around the pair.
Risk Reversals Show Limited Scope for Further Sell-Off
However, the EUR/JPY one month 25 delta risk reversals indicate low odds of a big sell-off below the 200-day MA. The gauge has erased a significant chunk of EUR put bias (bearish bets) over the last two weeks. As of writing, the risk reversals are being at 1.85 EUR puts vs. 2.85 EUR puts on Feb. 12.
The decline in the implied volatility premium of the puts indicates investors do not expect a dip below the 200-day MA to yield a deeper sell-off.
28 February EURJPY Technical Forecast
A break below 130.93 (Feb. 23 low) would expose support at 129.58 (200-week MA) and 129.27 (50-week MA). On the higher side, a move above 131.23 (200-day MA) could yield a corrective rally to 131.86 (10-day MA) and possibly to 132.18 (previous day’s high).
This article 28 February EURJPY Technical Forecast 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.
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