UPDATE: The EUR/JPY currency pair has plunged to 181.00, marking a significant drop for the fourth consecutive day. This rapid decline follows a retreat from the 186.25 level and has reached its lowest point in over two months during the Asian trading session on October 5, 2023.
The driving force behind this movement is a surge in the Japanese Yen’s strength, prompting heavy selling pressure on the Euro. The breakdown below crucial technical support levels, particularly the 50-day Simple Moving Average (SMA) and the 183.00 horizontal support, has fueled bearish momentum, leaving traders anxious about further losses.
Currently, the EUR/JPY is down nearly 0.50% for the day, with prices edging dangerously close to the 100-day SMA, positioned at 180.75. A breach below this threshold could signal deeper retracement, intensifying selling activity. The Moving Average Convergence Divergence (MACD) histogram reflects a more negative outlook, indicating that momentum is weakening as it hovers around the zero mark.
Technical indicators reveal an RSI reading of 36, suggesting waning momentum without reaching oversold conditions. A move below the 100-day SMA would raise concerns for traders, while a recovery above the 50-day SMA could re-establish bullish sentiment.
The Japanese Yen’s remarkable performance this week has made it the strongest currency against major pairs, as seen in trading data. Notably, it has surged 3.23% against the US Dollar and 2.84% against the Euro, reflecting a robust demand for the Yen amid shifting market dynamics.
With the current bearish trend, traders are closely monitoring the aforementioned support levels for signs of potential recovery or further decline. The market will be on high alert for any developments that could impact the Yen’s strength or the broader currency market.
As the situation unfolds, analysts recommend keeping a close eye on the technical signals, particularly the MACD and RSI, as they will provide critical insights into the future direction of the EUR/JPY cross. The coming hours are crucial for traders as they navigate this rapidly changing landscape.
Stay tuned for more updates as this story develops.
