EUR/JPY Timeframe H4: The EUR/JPY movement on the H4 chart shows a significant shift in market structure in recent weeks. After experiencing relatively consistent gains from late June to late July, the currency pair entered a sharp correction phase in early August. Intense selling pressure caused the price to fall from a high of around 187.41 to near 179.35 in a relatively short period of time. However, after hitting this low, the market began to show signs of a strong recovery. According to the chart, the price is currently hovering around 184.60. This position is particularly interesting because it is positioned between the 100-day moving average (MA), marked with a blue line, and the 200-day moving average (MA), marked with a red line. These two indicators provide a clear picture of the ongoing momentum shift. The 100-day moving average (MA) is currently below the price, while the 200-day moving average (MA) remains slightly above the market movement. This indicates that EUR/JPY is in a transition phase from a bearish trend to a recovery phase. A price breakout above the 100-day moving average (MA) is an early signal that selling pressure is easing. However, as long as the price remains below the 200-day moving average (MA), the medium-term trend has not fully shifted to bullish. From a trend perspective, the EUR/JPY movement can be divided into three phases. The first phase occurred from June to late July, when the price moved in a relatively stable uptrend. The second phase began in late July and early August, when a sharp decline occurred due to seller dominance. The third phase, currently underway, is characterized by a gradual price recovery. The nearest resistance area is at 184.75. This zone is the first barrier the price must overcome to continue strengthening. Interestingly, this area is also close to the 200-day moving average (MA), further strengthening the resistance. A breakout above this level would be a significant signal that buyers are regaining control of the market. The next resistance level is around 185.15. This level previously served as a fairly strong support level before being breached by selling pressure in early August. In technical analysis, broken support often transforms into resistance. Therefore, the 185.15 area plays a crucial role in determining the direction of the next movement.
If the price breaks through the resistance level of 185.15, the next target is the 186.28 area. This level is one of the distribution zones that formed in late July. A breakout above this area could potentially open up opportunities to reach the highest resistance level around 187.41. Meanwhile, the nearest support level is at 183.14. This area serves as the main foundation for short-term price movements. As long as the price remains above this level, the potential for an increase remains quite open. The next support level is at 181.95. This zone holds considerable strength as it served as a consolidation area during the recovery process following the sharp decline in early August. If selling pressure intensifies again, this area has the potential to become the next correction target. Stronger support is at 181.27. This area is a crucial point capable of halting price declines while the price forms a new bottom. If this support level fails to hold, the price will likely retest the 180.39 area. The lowest support level seen on the chart is around 179.35. This level represents the lowest point in recent months and is a crucial boundary determining whether the long-term trend can be maintained or will turn bearish. A closer analysis reveals an interesting dynamic between the price, the 100-day moving average (MA), and the 200-day moving average (MA). The 100-day moving average (MA) indicates that downward momentum is losing strength. On the other hand, the 200-day moving average (MA200) is still moving downward, indicating that medium-term bearish pressure has not yet fully dissipated. It's worth noting that the intersection between the 100-day and 200-day moving averages (MA200) has not yet generated a golden cross signal. This means that confirmation of a trend reversal has not yet fully formed. In other words, the current uptrend can still be categorized as a recovery phase, not a truly strong uptrend. In terms of candlestick patterns, the formation of a series of higher lows since early August indicates that buyers are starting to re-enter the market. Each correction tends to produce a higher low than the previous low. This pattern often indicates the beginning of a bullish trend. However, market participants should remain cautious, as the uptrend has not yet been followed by a breakout of key resistance. The 184.75 to 185.15 area remains a very strong barrier. As long as the price fails to break through this zone, consolidation remains highly likely. If the bullish scenario is confirmed, the short-term target is 186.28, while the medium-term target is 187.41. Conversely, if the price moves below the 100 MA again and penetrates the support at 183.14, selling pressure could increase and push the price towards 181.95. Overall, the current EUR/JPY movement indicates a shift in sentiment from bearish to neutral. Although recovery momentum is beginning to emerge, the market still needs further confirmation to confirm that an uptrend has truly formed.
