How Low Will EUR-JPY Go?

By: Mike Kulej

There is no question that the EUR-JPY is in a downtrend, but just how strong is it?
This pair fell to under the 109, a level not seen since early in the decade. In cases like this, it may be difficult to figure out how to put it in a proper perspective. Taking a step back and looking at a much longer-term chart maybe helpful. Like a monthly graph, for example.
This kind of time frame is not suitable for active trading, but it could reveal clues, which are not noticeable on smaller magnitude charts. After reaching an important high in 2008, the EUR-JPY fell to 112 later that year. Through most of 2009, the price rebounded to 139.
On the monthly chart, we can see it was simply a corrective swing in a bear market, followed by the current sell off. With the EUR-JPY making new lows, the technicals are confirming the bearish trend. The trendline has a sharp down angle, the ADX indicator is on the rise, signaling that the trend is strengthening. Another support is at the 100 price level, about 900 pips lower. On technical basis, the long-term bearish trend does not show any signs of turning around.

Forex Technical Analysis- How Low Will EUR-JPY Go?

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