FX.co ★ EUR/JPY

EUR/JPY Timeframe H4: The EUR/JPY currency pair, shown on the four-hour (H4) timeframe, provides a dramatic visual depiction of the shift in market sentiment and trend structure that occurred throughout the period from June to August 2026. A careful look at price action reveals a stable uptrend, a flash crash, followed by a strong V-shaped recovery. This comprehensive assessment is based on a combination of 100- and 200-period moving average trend indicators, along with key horizontal reference levels that act as support and resistance in the market. Looking at the moving averages embedded in the chart, two dynamic trend lines are visible. The blue line represents the 100-period moving average (MA100) for the medium-term trend, while the red line represents the 200-period moving average (MA200) for monitoring the long-term trend. In the first half of the chart, from late June to late July 2026, EUR/JPY was in a well-organized bullish trend. This uptrend's characteristics are validated by the price consistently remaining above both moving averages. Furthermore, the 100-day moving average (MA) was positioned above the 200-day moving average (MA) with a gentle upward slope, indicating stable buying momentum and minimal volatility for weeks. However, this market calm was radically shattered in late July 2026. The chart shows the emergence of a very large bearish candlestick that penetrated below the 100-day and 200-day moving averages within a short period. This decline turned into a market panic (panic selling), sending the price plummeting through various horizontal psychological levels without significant resistance. This extreme downward momentum not only forced the price to move well below the moving averages but also triggered a death cross, where the 100-day moving average (MA) turned sharply downward and crossed below the 200-day moving average (MA) in early August 2026, signaling a highly aggressive bearish trend reversal.

The market's panic finally reached oversold levels when the price touched its absolute horizontal support level around 179.35. This lowest horizontal level became a crucial turning point, where selling pressure completely exhausted itself and, in turn, triggered massive buying by buyers. Immediately after touching 179.35, the price formed a very long lower shadow, reflecting strong price rejection in that low price area. This initial recovery was also confirmed by the price's successful breakout above its nearest horizontal support levels around 180.39 and 181.27, which had been breached during the decline. The EUR/JPY price recovery process proceeded with momentum no less aggressive than during its decline. Throughout the first week until mid-August 2026, the price crept upwards, forming a nearly vertical recovery pattern. Within this upward shield, the price successively broke through the horizontal resistance level at 183.14 and then faced dynamic resistance from the Moving Average indicator. Interestingly, in mid-August, the price briefly stalled and consolidated below the 100-day moving average (blue line). However, the overwhelming strength of buyers led to the consolidation phase ending with an upward breakout. Solid bullish momentum continued, pushing the price upwards, eventually breaking through the 200-day moving average (red line) above it. At the last closing price on the far right of the chart, EUR/JPY is currently trading around 185.84, just below the next significant horizontal resistance level at 186.28. The price's recent move above both the 100-day moving average (MA) and the 200-day moving average (MA) indicates that the previous extreme bearish trend has been neutralized by the market. Although the 100-day moving average (MA) remains technically below the 200-day moving average (MA) due to lagging historical data, the 100-day moving average (MA)'s steep upward slope signals a potential golden cross, or a new long-term uptrend reversal, in the process of forming.