EUR/JPY is sporting a verrry interesting reversal candlestick on the daily time frame.
Is the pair ready to return to its longer-term trend?
We’re looking at EUR/JPY’s daily chart today!
EUR/JPY: Daily
EUR/JPY Daily Forex Chart by TradingView
In case you missed it, the yen has been making pips rain lately, possibly due to a combo of Japanese officials intervening in the FX markets and traders unwinding their JPY carry trades.
The euro isn’t doing badly either, losing pips against GBP, CHF, and JPY but also trading in the green against the rest of its major counterparts in July as political uncertainties in the region eased and European Central Bank (ECB) members underscored their “prudent” approach to cutting rates.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/JPY, which hit new 2024 highs near 175.40, turned lower and is now trading closer to the 166.83 area.
What caught our attention today is a Hammer poppin’ up on EUR/JPY’s daily chart. Specifically, a Hammer poppin’ up around a potential support zone.
That’s right! After a sharp downswing, EUR/JPY showed a bullish reversal candlestick near the 38.2% – 50.0% Fibonacci retracement levels and between the 100 and 200 SMAs.
Does this mean EUR/JPY is ready to extend its longer-term uptrend?
Look out for bullish candlesticks above the 166.00 psychological handle, which could draw in enough buyers to push EUR/JPY back up to the 168.00, 170.00, or 172.00 previous areas of interest.
Of course, EUR/JPY bears may just be taking a breather. If EUR/JPY’s next candlesticks close below the Hammer’s wick or the 200 SMA, the pair may not be done with its downtrend. It could retest the 162.00 previous lows or even head for the 160.00 before seeing sustained demand.
What do you think? Will EUR/JPY return to its uptrend in the next few weeks?