EUR/JPY Price Analysis: Broadening formation suggests downward pressure lies ahead

• EUR/JPY tumbles beneath the 140.00 figure as the cross dives below the 200-DMA and the 20-day crosses below the 100-DMA.
• A megaphone top formation suggests that downward pressure lies ahead on the EUR/JPY.
• EUR/JPY Price Analysis: Once it clears 138.80, a fall to 135.51 is on the cards.

The EUR/JPY drops below the 200-day Exponential Moving Average (EMA) at 140.18, extending its losses to three consecutive trading days, falling 2.40% since peaking around the last week's high of 142.93. Hence, the EUR/JPY is trading at 139.26, below its opening price, after hitting a daily high of 140.31.s

EUR/JPY Price Analysis: Technical outlook

From a daily chart perspective, the EUR/JPY is forming a megaphone top formation, usually a bearish formation, which was confirmed once the cross-currency pair broke below the 200-day EMA. Also, the 20-day EMA crossed below the 100-day EMA, exacerbating an acceleration of the downtrend, as sellers eye a break below the December 2022 low of 138.80.

Oscillators like the Relative Strength Index (RSI), aiming toward oversold conditions and the Rate of Change (RoC) staying below its zero line, confirm that sellers are in charge.

Therefore, the EUR/JPY first support would be the December low of 138.80. A breach of the latter will expose the September 26 daily low of 137.36, followed by the August 24 swing low of 135.51.

As an alternate scenario, if the EUR/JPY climbs back above the 200-day EMA, a rally toward the 20-day EMA at 142.21 is on the cards. Once cleared, it would expose the 100-day EMA at 142.43.

EUR/JPY Key Technical Levels