Yesterday in the American session, EUR/JPY reached the resistance zone of 143.75 where there is 8/8 Murray, which has become strong resistance. Failing to consolidate above this level, the currency pair quickly corrected to the downside, breaking the uptrend channel and is now below the 21 SMA trading at 142.63.
The USD/JPY pair continued its uptrend and has been gaining traction for the fourth day in a row. The uptrend accelerated during the early American session of June 29, and helped the EUR/JPY pair reach 143.80 and the USD/JPY pair to reach a new 24-year high at 137.00.
EUR/JPY is expected to trade below 143.00 in the next few hours and may reach the support zone of 6/8 Murray at 140.62 and could even hit 140.25.
In the medium term, if EUR/JPY continues to rise above the monthly support line of around 138.50, the outlook for the cross should remain bullish. However, a bearish correction is likely in the few days.
Seeing as the pair broke the downtrend channel and is now below the 21 SMA, we have the bearish outlook for the pair. It is expected to reach the psychological level of 140.00 in the coming days.
Our trading plan is to sell below 143.00 with targets at 141.73 and 140.62. The key is to wait for USD/JPY to make a technical correction because it is overbought and this could favor the fall of EUR/JPY.
