EUR/USD started a nice upward move and traded above the 1.1400 resistance. USD/JPY is currently facing a strong resistance near the 109.40 level
Important Takeaways for EUR/USD and USD/JPY
- The Euro recovered nicely and moved above the 1.1360 and 1.1400 resistance levels.
- There is a key ascending channel in place with support at 1.1425 on the hourly chart of EUR/USD.
- USD/JPY is struggling to clear a major bearish trend line with resistance at 109.40 on the hourly chart.
- There is a risk of a downside break below the 109.15 and 109.00 support levels in the near term.
EUR/USD Technical Analysis
After a major drop, the Euro found support near the 1.1280 level against the US Dollar. The EUR/USD pair started a nice upward move and traded above the 1.1360 and 1.1400 resistance levels.
The upward move was solid as the pair even broke the 1.1430 resistance and settled above the 50 hourly simple moving average. A high was formed at 1.1449 on FXOpen and the pair later corrected lower.
It declined below the 50% Fib retracement level of the recent wave from the 1.1389 low to 1.1449 high. However, the decline was protected by the 1.1410 level and the 50 hourly simple moving average.
Moreover, the 61.8% Fib retracement level of the recent wave from the 1.1389 low to 1.1449 high acted as a support. At the outset, it seems like there is a key ascending channel in place with support at 1.1425 on the hourly chart of EUR/USD.
If there is an upside break above 1.1445 and 1.1450, the pair is likely to accelerate gains above the 1.1480 resistance level. The next stop for buyers could be near the 1.1500 level. On the other hand, the 1.1425 level might act as a strong support.
If there is a drop below the 1.1425 and 1.1410 supports, the pair could drop towards the 1.1380 support level in the near term.
USD/JPY Technical Analysis
The US Dollar failed on more than two occasions to break the 110.00 resistance against the Japanese Yen. As a result, there was a sharp decline in the USD/JPY pair below the 109.60 and 109.50 support levels.
The pair even traded below the 109.40 support and the 50 hourly simple moving average. A low was formed near the 109.12 level before the pair started an upside correction.
It recovered above the 23.6% Fib retracement level of the last decline from the 109.94 high to 109.12 low. However, the recovery was capped by the 109.50 resistance. Moreover, there is a major bearish trend line formed with resistance at 109.40 on the hourly chart.
The pair also failed to surpass the 50% Fib retracement level of the last decline from the 109.94 high to 109.12 low. It seems like the pair is facing a solid resistance near the 109.40 and 109.50 levels, above which it could resume its upward move towards the 110.00 resistance.
On the downside, an initial support is near the 109.20 level, below which there is a risk of more losses. The next stop for sellers could be near the 109.00 or 108.60 levels.