EUR/JPY H4 – More buyers moving into the market

The EUR/JPY currency pair, on the H4 time-frame, was in a downward move until the 25th of October when a lower bottom was recorded at 120.354. Demand pressure then started increasing.

After the bottom at 120.354 the price broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator broke the zero baseline into positive terrain and there was a crossing of the 15 and 34 Simple Moving Averages, call a Golden Cross. This signposted a possible price reversal or initial stages of a new trend.

A conceivable critical resistance level formed when a higher top was recorded on the 30th of October at 121.468. Currently sellers are trying to drive the price lower.

If the EUR/JPY breaks through the critical resistance level at 121.468, then three possible price targets might be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 121.468 and dragging it to a possible support level near the 15 Simple Moving Average at 121.062, the following targets can be calculated. The first target was anticipated at 121.719 (161 %). The second price target can be predicted at 122.125 (261.8%) and the third and final target may be expected at 122.782 (423.6%).

If the support level at 121.062 is broken, the scenario is invalidated and must be re-evaluated.

As long as buyers maintain an assured attitude and demand overcomes supply, the outlook for the EUR/JPY currency pair on the H4 time-frame will remain bullish.

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