Select the account you'd like to open

FX analysis

Chart of the week – Potential bullish reversal on sight for EUR/JPY as ECB & BOJ looms

euro currency

Chart of the week – EUR/JPY 

Chart of the week – Potential bullish reversal on sight for EUR/JPY as ECB & BOJ looms

Short-term technical analysis (1 to 3 weeks)

(click to enlarge chart)

Time-stamped: 17 Jul 2022 at 12:00pm SGT 

Source: CMC Markets

  • Both the European central bank (ECB) and Bank of Japan (BOJ) will hold their respective monetary policy decision meetings on the same day on Thursday, 21 July.
  • Integrated technical analysis (graphical, momentum, Elliot Wave/fractals) suggests that the recent four weeks decline of 738 pips seen in the EUR/JPY from the 8 June 2022 high to the 8 July 2022 low of 136.87 may have reached an inflection zone that is likely to kickstart a short-term recovery process.
  • Watch the 136.70 key medium-term pivotal support for a potential short-term bullish reversal towards 141.50 followed by 144.25/60 (8 June/22 June/28 Jun 202) swing highs. Clearance with a 4-hour close above 144.60 reinforces a further potential up move towards the next resistance at 148.30/149.10.
  • However, a break with a 4-hour close below 136.70 invalidates the bullish reversal scenario for an extension of the corrective decline towards the next support at 133.90/132.90 (12 May 2022 swing low that confluences with the former 20 October 2021/10 February 2022 swing highs).
  • Positive elements; recent price actions have staged a rebound of 300+ pips from its 8 July 2022 low of 136.70 to its recent 15 July 2022 high of 139.88 and the rebound has taken shape right at the 61.8% Fibonacci retracement of the prior up move from 12 May 2022 low to 8 June 2022 high, surpassed above the 50-period moving average that has capped previous rebounds since 5 July 2022 and the 4-hour RSI oscillator has staged a bullish breakout above key corresponding resistance at the 50% level after it hit its oversold region on 6 July 2022.

Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.

Sign up for market update emails