EUR/JPY forecast for January 18, 2021

Looking at the chart on the weekly time frame, we see that the EUR/JPY pair reached the zone around 127.00 but failed to stay above, and now the pullback is in effect. Currently, testing is a moving average of the MA200 (purple line), the break was made below, and there is now a chance it will still slide down. Also, on the chart, we see that the previous consolidation was between 123.00-124.00; we can see EUR/JPY pair in that zone. For the bullish scenario, there is now no indication of this time frame.

On the daily time frame, we see one large growing channel, but we also see it narrowing into a corner and that the EUR/JPY pair has less and less room for manipulation. Below is close to the lower trend line, which can be a good resistance to lower levels. We can notice that we have a Head & shoulders pattern on the chart and that the neckline coincides with the possible resistance on the trend line. As for the moving averages, the pair is below MA20 and MA50, and we have the attention and the next support on the MA100 at 124.50.

We see that the EUR/JPY pair is now close to a very important place on the chart in the four-hour time frame. Soon we can expect testing of the bottom trend line, zone break on the previous resistance at 124.80. The EUR/JPY pair is below all moving averages, which, based on them, tells us about the bearish trend. For the bullish, we have to wait for the rejection from the trend line and a secure confirmation above 126.00.

From the news for today, we can single out the following:

AUD/USD forecast for January 18, 2021

Japanese industrial production fell for the first time in six months in November, final data from the Ministry of Economy, Trade, and Industry showed on Monday. Industrial production fell 0.5 percent on a monthly basis, as opposed to an increase of 4 percent in October and rapid estimates of zero growth. This was the first drop in six months. As for the euro, the ECB’s Lagarde and Panetta will participate in the Eurogroup meeting later Monday.