EUR/JPY: RSI Indicates Textbook Sell Signal

5 Jul 2023

EUR/JPY appears to be stuck in a narrow range as it bounces back from a fresh weekly low (156.79), but the exchange rate may face a larger pullback as the Relative Strength Index (RSI) slips below 70 to indicate a textbook sell-signal.

EUR/JPY Rate Outlook

EUR/JPY consolidates following the failed attempt to break/close above the 157.20 (161.8% Fibonacci extension) to 157.90 (161.8% Fibonacci extension) region, but the RSI may continue to show the bullish momentum abating as it falls back from overbought territory.

Failure to retain the weekly range may push EUR/JPY towards 154.90 (61.8% Fibonacci extension), with a break/close below 153.30 (50% Fibonacci extension) opening up the 151.60 (38.2% Fibonacci extension) area, which lines up with the 50-Day SMA (151.49).

Nevertheless, EUR/JPY may track the positive slope in the moving average as it registered fresh yearly highs every single month so far in 2023, with a break/close above the 157.20 (161.8% Fibonacci extension) to 157.90 (161.8% Fibonacci extension) region opening up the September 2008 high (159.61).

17 Jul 2023

Catatan

The recent pullback in EUR/JPY may have run its course as it extends the series of higher highs and lows from the monthly low (153.46).

EUR/JPY appears to have reversed ahead of the 50-Day SMA (152.49) as it stages a three-day rally and the exchange rate may track the positive slope in the moving average to mirror the price action from earlier this year.

The move back above 154.90 (61.8% Fibonacci extension) may push EUR/JPY towards the 157.20 (161.8% Fibonacci extension) to 157.90 (161.8% Fibonacci extension) region, which incorporates the June high (158.00), with the next area of interest coming in around 160.40 (100% Fibonacci extension).

However, failure to break/close above the 157.20 (161.8% Fibonacci extension) to 157.90 (161.8% Fibonacci extension) region may keep EUR/JPY within the June range, with a move below 154.90 (61.8% Fibonacci extension) bringing 153.30 (50% Fibonacci extension) back on the radar.