The Euro to Japanese Yen exchange rate has been stagnant recently, sitting at a weekly low.
Stagnant prices, a reversal from an upward trend line, and bearish MACD signals all point to a time to sell.
Yield declines and rising prices in Japan are bolstering the reversal trends.
Cross-currency sellers are prodded by a seven-week-old resistance line ahead of 200-SMA support.
On Friday morning, European traders see EUR/JPY hovering at the intraday low of 158.20. To do so, it looks to the recent decline in Treasury bond yields and the positive prints of Japan’s inflation data on an otherwise slow trading day for guidance.
However, the bearish MACD signals and the negative break of the 50-SMA draw a lot of attention, giving sellers reason to be optimistic despite the pair’s evident U-turn from a rising trend line that had been in place for three weeks.
The prior resistance line from late June limits how far the EUR/JPY pair can drop in the short term to around 157.60.
After that, buyers of EUR/JPY will be defended by the 200-SMA level near 156.55.
The many supports between 155.50 and 153.40 could prompt selling before leading them to the prior monthly low near 151.40 if the quote remains bearish above 156.55.
A resumption of buying EUR/JPY, on the other hand, requires a decisive break over the 50-day simple moving average (SMA) at 158.45.
However, the bulls in the EUR/JPY will face resistance from an ascending trend line from July 21, near 159.55, and then the 160.00 round number.