EUR/JPY: 38.2% retracement to hold, bullish there on - FXstreet

Valeria Bednarik, chief analyst at FXStreet explained that the Japanese yen continued weakening against all of its major rivals, weighed by poor Japanese data that fueled speculation that the BOJ will extend its monetary stimulus and in spite of a sharp downturn in European and American equities. 

Key Quotes:

"The EUR/JPY pair rallied to a fresh August high of 115.37, trading nearby by Wall Street's close, and with a strong upward potential in the short term, as the pair recovered above the 38.2% retracement of its latest bullish run, after consolidating around the 61.8% retracement of the same rally for over three weeks.

In the 1 hour chart, the Momentum indicator heads modestly higher above its 100 level, while the RSI indicator heads north in overbought territory, at 77, as the 100 and 200 SMAs accelerate higher well below the current level.

In the 4 hours chart, technical indicators also head sharply higher with the RSI at 80, and with no signs of changing bias. The mentioned 38.2% retracement stands around 114.95, now the immediate support, and the upward potential will persist as long as the level holds, with scope now to extend up to 116.10/30, the next Fibonacci resistance."