EUR/JPY has been undergoing a steady downtrend - SocGen

Research Team at Societe Generale, suggests that after having faced stiff resistance near a multi-decadal trend line in 2014, EUR/JPY has been undergoing a steady downtrend.

Key Quotes

“It is noteworthy that the pair has given a sustainable break below its 20 month MA; this has resulted in persistent downtrends in the past. With monthly MACD in negative territory, EUR/JPY appears to continue the downtrend.

If we drop down to daily chart, the pair embarked on a corrective recovery last month and faced resistance near 128.30, the 61.8% retracement from January highs. Formation of a significant weekly bearish engulfing at those levels suggests resumption in down move. The pair is now violating recent lows (122) and looks poised to head towards 119.90 and perhaps even towards the projected target for the retracement at 117/115. 124.20 will be an immediate resistance while previous low of 125.75/126 is likely to be an important hurdle.”