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EUR/JPY declines remain shallow as buyers defend the 130.00 area

FXstreet.com (Barcelona) - The EUR/JPY finished the day slightly lower, down 55 pips at 130.88 but well off the lows set earlier in the day at 130.38

From a technical perspective, the pair has been consolidating in a fairly tight range for the past couple of weeks which is a healthy sign in a longer term uptrend. Short term moving averages remain slightly bearish on the daily chart, with price still unable to close back above both the 9 and 20dma’s. The RSI (14) is currently sitting in neutral set up, consolidating between the 40 and 60 levels. Often times when trend following and momentum indicators are in disagreement, price may continue to consolidate for a number of sessions before the next sharp move higher or lower.

According to Val Bednarik at FXStreet.com, “Yen recovered its strength across the board, with the EUR/JPY falling as low as 130.37 before bouncing some with US stocks late recovery. However, the bearish potential has increased after latest failure to regain the upside. The hourly chart shows price developing below 100 and 200 SMAs, while the distance in between both widens, pointing for more downward moves. Technical indicators stand in negative territory, showing not much strength at the time being, but also supporting the downside: 130.20 is the support to watch as once below, the pair has scope to extend its slide towards 128.80 price zone.”

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