The crossing of the euro with the Japanese yen has entered a bearish cycle since September 7. Then on September 14, the price of the euro/yen pair fell below the EMA of 200 and the SMA of 21. The scenario remains bearish for this pair and is expected to stay above the support of 4/8 murray located at 128.12.

Due to the strength of the US dollar, this pair has fallen from the level of 131.72 to the key support level at 128.12. As long as the pair remains above the pivot point at 4/8 of murray, it is likely that the euro/yen pair can recover from the downward pressure and win back some of its losses.

Higher at 128.80 is the SMA of 21 that is putting downward pressure on the pair. This will be a barrier and only a break and consolidation above 128.90 level of 5/8 of murray will help the bullish force to take it to the level of resistance of the 200 EMA at 129.55.

If the strength of the EUR/JPY pair fails to consolidate above 128.90, it will be a good opportunity to sell the pair with the target at 128.12. In addition to this, if the bearish force prevails and consolidates below 128.12, this will expose the support of 127.34 located at 3/8 of murray.

Given that EUR/JPY has not managed to break through the descending line of the moving average of the eagle indicator, it is likely that this is only a correction, and the pair will fall below the SMA of 21 in the next few hours. The eagle indicator is showing bearish signal.

Our outlook is still bearish for this pair, so you can sell below 5/8 and buy above 4/8 of murray. This will be the price range ahead of the FOMC report that will be published tomorrow which could cause strong volatility on the pair.

Support and Resistance Levels for September 21 - 22, 2021

Resistance (3) 129.60

Resistance (2) 129.24

Resistance (1) 128.84

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Support (1) 128.12

Support (2) 127.96

Support (3) 127.60

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Trading tip for EUR/JPY for September 21 - 22, 2021

Sell if there is a pullback at 128.90 or sell below 128.70, with take profit at 128.12 and 127.34, stop loss above 129.25

Buy if EUR/JPY rebounds at 128.10 (4/8), with take profit at 128.90 (SMA 21), stop loss below 127.75.