EUR/JPY Price Analysis: Multiple technical divergences forming on the daily chart

• EUR/JPY is trading 0.17% lower in a lacklustre session.
• There are two separate divergences on the RSI and MACD.

EUR/JPY daily chart

EUR/JPY has been in a very strong uptrend but over the last five sessions, the price has pulled back around 1.27%. The main feature on the chart is the two divergences. First is the one on the MACD which started back on 5th June. The Relative Strength Index has also recently thrown up a bearish divergence signal marked by the red lines on the indicator. 

The divergence signal does not always mean the trend is going to change but it is a very good signal that the momentum is starting to slow down. On occasion, the signal can indicate a trend change. On this particular chart, the price has moved with some velocity but a break of the black support line at 124.31 could confirm the bearish bias.

The major support zone on the chart is at the blue line near 123.00. The price stopped at this level on 16th January but it has also been used in the past at some important pivot points. The price is still in a very nice uptrend and further confirmation is needed before we can call this pullback a change in trend. 

Additional levels