The EUR/JPY has lost a lot of ground in April. The pair closed the month lower by 636 pips. On the first picture below we can see that the currency pair is oversold on the lower timeframes according to the Stochastic Oscillator. Values below 20 indicate an oversold market.



Let's go up in timeframes. On the daily chart below we see that the pair is now right at a critical support level. This area around 122 Euros per Yen has acted as support on two other separate occasions, forming a double bottom formation. This can be strong support, especially when backed up with oversold indications.



I'm expecting that prices will get bogged down in this area during May. Intially we could below but I think this previous support will act as a magnet attracting prices from the new lows. Thus I'm forecasting 121.75 for next month.
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