EURJPY – 119.00 Firmness Points To Bottom Of Consolidation

The EURJPY daily chart above shows a bounce at the 116.34 low. As indicated, its bullish momentum has stalled at the 119.00 handle, where prices drifted lower for a potential retracement.

The depth of the pullback depends on how firm the 119.00 resistance holds in case of a further upside move. However, it will be no surprise if we revisit the previous lows of mid-116.XX anyway.

We can see decent support at the 117.00 handle which provided a supportive structure in the past as most candlesticks ended up as pinbars. In case that support fails, the lows of the 116.40 zone will be likely revisited.

Further weakness will expose the Sep 2019 low of 115.85. The daily chart also suggests that if we break and close under the 116.30 region, we can expect to see an extended leg down all at the 115.00 round support.

The hourly chart below tracks the current price action. It shows an initial break of the ascending trendline and this makes the 118.00-10 region a good resistance going forward.

While prices stay below this resistance, we can expect the descending trendline to act as short-term support.

If the bounce shows weakness, the short-term structure will carry downside risk towards the 117.00 support. The hourly chart, however, is indicative of a lower low near the 116.70 mark.