Momentum Stays Strong

Momentum is still strong after moving past the Ichimoku Cloud. There’s resistance at 171.09, and if we break through this, we could test 172.00. On the other hand, support is at 169.25 and 168.45, which was the low from July 1. The Euro performed well against major currencies this week, especially against the British Pound. The changes in various currency pairs highlight the Euro’s strong position in the foreign exchange market. In the EUR/JPY pair, we’re comfortably above 170.00. This shows that there is ongoing buying pressure, even after a slight pullback. It’s no accident that the pair stays above the Ichimoku Cloud, which acts as a sort of momentum guide, suggesting an overall upward trend for now. However, the RSI is nearing overbought levels, which raises some concerns. The price could still rise in the short term, but we should be aware of possible sudden reversals if things get too extended. The 171.09 level is crucial. It was previously a resistance point, and breaking it convincingly could quickly lead us to 172.00. Psychological levels like this often draw prices once momentum builds. If the price drops instead, falling below 170.00 could weaken the bullish trend we’ve seen over the past week. From our viewpoint, this would likely lead to retests of 169.25 and possibly 168.45, the critical support from early July. Traders will closely monitor this area for downside risks. However, price movements alone don’t tell the whole story. Today’s small dip of 0.11% might seem minor, but with US markets closed for Independence Day, trading volume is thinner. This can exaggerate price movements—not because traders are reacting strongly, but simply because there are fewer traders. In situations like this, it’s wise to keep reactions muted to avoid false signals.

Euro’s Strength Across Currencies

Looking back, EUR/JPY fell sharply earlier in the second half of the year, dropping from 175.42 to 154.39 before this recent rebound. This past movement may have helped restore confidence in the pair. Notably, prices rising above the Ichimoku structure support the notion that this rebound is sustainable. The 171.09 level remains short-term resistance. If we break through it convincingly, we have room to move toward 172.00, although timing and trade entry may become trickier as the RSI continues to rise. Support levels are at 169.25 and further down at 168.45, both of which remain intact. Traders often see these levels as safety zones, where buyers might re-enter or where any declines may slow. As long as these levels hold, the broader bullish trend stays in place. Additionally, the Euro’s recent strength isn’t limited to just this pair. Its strong performance, particularly against the British Pound lately, adds to the positive momentum for EUR/JPY. We’re witnessing less Yen-specific volatility and more of the Euro gaining traction across various pairs. The percentage changes among various pairs this week emphasize this—price trends often reflect wider cross-currency dynamics, not just singles. We’ll keep an eye on liquidity issues and overall rotations in the foreign exchange market. A positive trend in Euro cross-pairs is important. Traders using shorter-term setups, which rely on quick directional moves, must manage their trades carefully. We’re cautious about weekend gaps and low trading volumes on Fridays that could distort signals. Those taking directional risks should wait for confirmation at key levels rather than acting too soon. Create your live VT Markets account and start trading now.

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