EUR/USD is trading with a positive bias above the 1.1060 support area and it could continue to rise. Conversely, USD/JPY is facing a lot of hurdles near 108.80 and it might decline again.
Important Takeaways for EUR/USD and USD/JPY
- The Euro started a strong recovery above the 1.1045 and 1.1060 resistance levels.
- There is a short term contracting triangle forming with resistance near 1.1080 on the hourly chart of EUR/USD.
- USD/JPY is currently trading in a bearish zone and it could continue to decline towards 108.25.
- The pair is facing a strong resistance near 108.85 and a bearish trend line on the hourly chart.
EUR/USD Technical Analysis
The Euro formed a decent support base near the 1.1010 level and started an upward move against the US Dollar. The EUR/USD pair gained bullish momentum after it broke the key 1.1040 resistance area.
The upward move was strong as the pair even broke the 1.1060 resistance and settled above the 50 hourly simple moving average. It opened the doors for more gains and the pair traded towards the 1.1100 level.
A high was formed near 1.1089 on FXOpen and the pair is currently consolidating gains. It traded below the 23.6% Fib retracement level of the upward move from the 1.1048 low to 1.1083 swing high.
At the moment, the pair seems to be holding the 1.1070 support area and the 50 hourly simple moving average. Moreover, there is a short term contracting triangle forming with resistance near 1.1080 on the hourly chart of EUR/USD.
If there is an upside break above the 1.1080 resistance, the pair could continue to rise towards the 1.1100 and 1.1120 resistance levels. On the downside, the main support is near the 1.1065 level.
Besides, the 50% Fib retracement level of the upward move from the 1.1048 low to 1.1083 swing high is also near the 1.1065 level. If the pair fails to stay above 1.1065 and 1.1060, it could correct further lower towards the 1.1040 support area.
USD/JPY Technical Analysis
The US Dollar remained in a bearish zone below the 109.00 and 109.20 resistance levels against the Japanese Yen. As a result, the USD/JPY pair declined below the 108.80 and 108.50 support levels.
The pair even settled below the 108.50 level and the 50 hourly simple moving average. Moreover, there was a break below a connecting bullish trend line with support near 108.57 on the hourly chart.
The pair traded as low as 108.35 and it is currently correcting higher. It tested the 38.2% Fib retracement level of the recent decline from the 108.82 high to 108.35 low.
On the upside, there are many resistances, starting with 108.60. It coincides with the 50% Fib retracement level of the recent decline from the 108.82 high to 108.35 low.
The main resistance is near the 108.85 and 108.90 levels. Besides, the pair seems to be facing a strong resistance near 108.85 and a bearish trend line on the hourly chart.
Therefore, a clear break above the 108.90 and 109.00 levels is must for a decent increase in USD/JPY in the near term. On the downside, an initial support is near the 108.35 level, below which there is a risk of more losses towards the 108.20 area.