FX.co ★ UFCworriers | EUR/JPY

DAILY CHART ANALYSIS OF EURJPY Technical analysis of EURJPY indicates that the overall market structure is still bullish despite the pair currently experiencing a phase of correction. The long-term trend is marked by a continuous series of higher highs and higher lows from the 176.50 area to the recent high near 186.10. In fact, EURJPY was able to raise momentum significantly during that uptrend, with the price mostly trading above the moving average zone that was rising. The current drop is a retracement within the dominant uptrend structure and not yet a reversal. At the 186.10 resistance zone, EURJPY was strongly rejected, and it led to a pullback to the 181.00 to 180.50 demand zone. Buyers returned to that area after the market had absorbed the structural support. EURJPY initially declined to that level and then bounced back. The move up from 180.50 clarifies that level as the key higher low in the bullish pattern. If EURJPY remains above this point, the long-term trend scenario will still be valid. After the Fibonacci retracement was drawn from the swing low at 180.50 to the swing high at 186.10, it shows correction levels that are currently directing the price movement. Price has already tested and moved up from 182.35, which is the 23.6% Fibonacci retracement area, thus showing initial recovery momentum. The 38.2% retracement, which is around 183.10, is acting as a resistance area at the moment. EURJPY has made a reaction at this level, hence it can be inferred from the chart that the market is weighing whether to further rise or consolidate. 50% of the Fibonacci retracement is approximately at 183.65, which is in line with a resistance area at the same level, as can be seen from the chart. The level is the center point of the correction and is an important obstacle for the continuation of the uptrend. In case EURJPY manages to surpass and maintain above 183.65, the subsequent target running upwards would be the 61.8% Fibonacci retracement, which is close to 184.25. The 61.8% level is commonly regarded as the most important retracement zone, and a strong move above it would indicate that the correction is finishing. If 184.25 is exceeded, the way to the previous high at 186.10 would most probably be opened again. However, failure to break the level can lead to EURJPY trading within a consolidation range before making another attempt to go higher. The internal trend structure of the price correction indicates that the price is forming a short-term ascending channel from 180.50. This means that the price is making a controlled recovery rather than an aggressive rebound, which is typical during retracement phases. EURJPY is slowly regaining its bullish momentum and has support between 181.40 and 182.00. This support band is now crucial for the price to keep the recovery structure. The market would be de-established again by a breakdown of 181.40 to 180.50, thus the pattern would be weakened. Resistance is gradually stacked with 183.10 as the first technical ceiling and 183.65 as the stronger midpoint resistance. In order to confirm the restoration of bullish expansion, EURJPY has to break through the stacked levels. The agreement between the horizontal resistance and the Fibonacci retracement enhances their technical significance. Traders usually monitor these confluence areas, which makes the reaction more likely when the price reaches them. The bigger technical aspect still supports the primary uptrend continuation; in fact, the correction has not gone below the higher low structure. EURJPY still stays above the long-term support trend line and is bullish on the daily timeframe. The decline seems to be in line with the previous rally, which technically leaves the trend in good condition rather than being overdone. Basically, EURJPY is doing a normal retracement within a strong uptrend while the Fibonacci levels are guiding the price directions. As long as the price stays above 181.40 to 180.50, the bullish pattern remains intact; on the other hand, a strong break above 183.65 and then 184.25 would signal the next impulsive leg higher. If none of the supports or resistances are broken, EURJPY may continue to move sideways between these levels as the market gets ready for its next move.