EUR/JPY has dropped below the 50 days moving average and has a potential of a further drop towards 123.00. The pair is currently trading at 123.70 with immediate support at 123.40 while the 123.00 is acting as a strong support level. The near term resistance is at 124.20 another resistance is present at 124.65.

The RSI line is below the neutral zone and supportive of the bears. The pair is also below the mid-Bollinger band while the lower band support is at 122.42. The SMA-14 is indicating resistance area at 123.94 and the SMA-50’s resistance area is at 124.77. The pair is falling from nearly 125.000 where a couple of Doji formations are present, currently on the 4-hourly chart the lows are getting further lower and favors intraday sell entries. A decent sell entry would be at 123.80 with a target of 123.25. A tight stop-loss for this trade would be just above 124.20 area.

Bears are anticipating a closing below 123.00 that is likely to raise the chance of a fresh drop towards 122.00. On the upside, only an intraday closing above 124.30 would provide some control back to the bulls.

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By LCMS Traders FX Analysis Team

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