EURJPY – Is the Trading Range About to be Broken?

The euro has been trading within quite a tight range against the yen over the last couple of weeks between 112.50 and 114 and only today failed at the upper end of the range, but is it done there?


The pair entered the Ichimoku cloud on the 4-hour chart for the second time in that period, but unlike last time, on this occasion the top of the cloud was tested and price rebounded lower.

USD/JPY – Yen Edges Lower Ahead of Fed Minutes

Now in the cloud, the pair faces a test of support at the bottom of the cloud, around 113. Should it break below, then we could possibly see the bottom of the trading range being tested once again.

If, however, the bottom of the cloud provides sufficient support for the pair, it may signal a bullish break out of the range in the coming days.

A bounce off the bottom of the cloud may trigger another push higher and test of the top of the cloud, a break of which would indicate that the pair has entered into bullish territory on the 4-hour chart for the first time since the end of July.

OANDA MP – FOMC Minutes Eyed (Video)

This could be the spark that the pair needs to really test the 114 resistance level that has held firm previously.


The fact that we are seeing a bottoming pattern forming on the daily chart (possibly a double bottom) after the pair thus far failed to make a new lower low may suggest the outlook for the broader trend is looking more bullish after trending lower since the end of 2014. Of course, much more confirmation is needed on the daily and weekly charts before this becomes apparent.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam