EUR/JPY and GBP/JPY Remains At Risk of More Downsides

Aayush Jindal -

The Euro and British Pound started a steady decline in the past few days against the Japanese Yen. Both EUR/JPY and GBP/JPY are likely to face hurdles and remain at a risk of more losses.

Important Takeaways for EUR/JPY and GBP/JPY

  • The Euro failed to stay above the 120.80 support and extended its decline against the Japanese Yen.
  • There is a major bearish trend line forming with resistance near 119.95 on the hourly chart of EUR/JPY.
  • GBP/JPY broke a key support zone near the 134.00 region to move into a bearish zone.
  • There is a crucial bearish trend line forming with resistance near 133.25 on the hourly chart.

EUR/JPY Technical Analysis

After facing hurdles near the 122.40 and 122.50 levels, the Euro started a steady decline against the Japanese Yen. The EUR/JPY pair broke many major supports near 121.00 and 120.80 to enter a bearish zone.

Besides, there was a close below the 120.50 level and the 50 hourly simple moving average. It traded to a new monthly low at 119.58 on FXOpen and it is currently consolidating losses.

On the upside, an initial resistance is near the 119.95 and 120.50 levels. There is also a major bearish trend line forming with resistance near 119.95 on the hourly chart of EUR/JPY.

Above the trend line, the 50% Fib retracement level of the recent decline from the 120.54 high to 119.58 low is also at 120.06. The main resistance on the upside is near the 120.40 level and the 50 hourly simple moving average.

The 76.4% Fib retracement level of the recent decline from the 120.54 high to 119.58 low is also near the 120.31 level. Therefore, the pair must surpass the 120.00 and 120.40 resistance levels to start a strong recovery wave.

Conversely, the pair could continue to move down and it might soon break the 119.50 support zone. The next key supports are near the 119.00 and 118.80 levels.

GBP/JPY Technical Analysis

The British Pound also followed a similar pattern declined steadily from the 136.00 resistance against the Japanese Yen. The GBP/JPY pair traded below the 135.00 pivot level to move into a bearish zone.

More importantly, the pair settled below the 133.80 support area and the 50 hourly simple moving average. The pair traded to a new monthly low at 132.38 and it is currently consolidating losses.

On the upside, an initial resistance is near the 133.20 and 133.30 levels. There is also a crucial bearish trend line forming with resistance near 133.25 on the hourly chart.

The trend line is close to the 23.6% Fib retracement level of the recent drop from the 136.34 high to 132.38 low. The key resistance on the upside is near the 133.80 level (the recent breakdown zone) and the 50 hourly simple moving average.

The 38.2% Fib retracement level of the recent drop from the 136.34 high to 132.38 low might also act as a resistance near 133.90. Therefore, GBP/JPY must climb above the 133.30 and 133.40 resistance levels to start a strong recovery wave.

If not, the pair is likely to resume its decline from 133.25 or 133.40. An initial support is near the 132.40 level, below which there is a risk of more downsides in GBP/JPY below 132.00 and 131.50.