EUR/JPY Price Analysis: The bulls are digging in their heels

EUR/JPY bulls are stepping in and the price could be due for an upside continuation.
The US stock market is on firmer ground as investors move in at a discount following Monday's blood bath.

EUR/JPY is on the up as traders get back behind the US stock market in a slightly firmer risk tone on Tuesday,

Profit-taking has likely played a role in the bid considering the huge sell-off a the start of the week.

The cross is benefitting due to its high beta nature as investors begin to rationalise that fears of another crippling round of global lockdowns are potentially overblown.

EUR/JPY hourly scenario 1

Should the price stall at this resistance and correct in a drift to the downside, then the 23.6% Fibonacci retracement and correlation with prior resistance structure could be a solid area of support.

Below there the 38.2% Fibonacci could be the last defence before an onwards bullish continuation from which would present a bullish trading opportunity to target the next resistance structure between 129.65/80.

EUR/JPY hourly scenario 2

However, the bulls are firming up at the time of writing and the bulls are sticking in their heels. This could result in an imminent break of the current resistance near 129.50.

A break and close above would be bullish and create the next bullish structure from 129.50. On a retest of the structure, bulls could be lurking for a longing opportunity towards the 129.65/80 targets area.

Supporting the bullish outlook, the S&P 500 is headed higher at the time of writing and there is a close correlation between EUR/JPY and the US stock market:

S&P 500 15 min chart

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.