Will the price of EURJPY start to fade at these monthly highs?
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The price of EURJPY has come into a key monthly high, suggesting we could see a slight reversal in price. The European Central Bank (ECB) has been hiking interest rates to fight the climbing inflation rates, and this looks set to continue. The ECB was one of the last central banks to hike rates, suggesting they are slightly behind the curve, and could be looking to catch up with other central banks globally. On the other hand the Bank of Japan (BoJ) is sticking to their super low rates. This divergence has seen EURJPY prices move higher. Another factor could be the risk environment, which has improved over the last month seeing JPY weaken.
The EURJPY price is coming into a key monthly zone of resistance between 148.40 and 149.50. This zone uses the highs from December 2014, which saw prices fall over 3700 pips. If the price rejects here we could see the price move back towards the recent highs at 145.50. Traders looking to get long could look for entries around this level.
The price on the chart has traded through multiple technical levels and some observations included:
- Price is trading at key monthly resistance.
- Price is trading within a bullish channel on the daily time frame.
- Currently the price is at the resistance zone.
- Buyers could look to take profits here which could trigger some short term selling pressure.
- If the price reverses here buyers could anticipate a pullback to previous highs at 145.50.
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