EURJPY’s fresh pullback from a multi-year high has yet to eliminate all bets that the one-and-a-half-month ascent could rejuvenate from the 136.30 barrier, which is the 23.6% Fibonacci retracement level of the rally from the 15-month low of 124.38. Further sponsorship of this bullish premise is being reflected in the climbing simple moving averages (SMAs).
Meanwhile, the short-term-oscillators are painting a picture where sellers are in the driver’s seat, mirrored by the excess in negative momentum. The MACD, far above the zero mark, has faded beneath its red trigger line, while the dipping RSI is nearing the 50 level. Moreover, the negatively charged stochastic oscillator is promoting extra bearish moves in the pair.
Currently, if sellers retain control, they will need to overwhelm the immediate downside deterrent being the mid-Bollinger band, which is in the vicinity of the 23.6% Fibo at 136.30. Should these combined supports fail to limit the depth of the pullback in the pair, the 135.50 low and the 135.00 handle could then attempt to impede the pair from weighing on the key 134.00-134.41 base, formed by the early April trough and the 38.2% Fibo. In the event the pair sustains the downward trajectory, the 132.91-133.47 support border may then draw traders’ focus.
Otherwise, if the 23.6% Fibo and the mid-Bollinger band manage to rekindle strong upward drive, the bulls could then perhaps encounter initial resistance around the 138.38 level, ahead of the 139.00 mark and the upper Bollinger band at 139.40. Should bullish impetus prevail and overrun the near 82-month peak of 140.00, the bulls may then aim for the 140.62-141.05 resistance region, linked to the June 2015 highs.
Summarizing, EURJPY is sustaining a bullish bias north of the 23.6% Fibo of 136.30 and the 135.50 low. That said, a price drop beyond the 131.37-132.17 zone could spark worries about the positive structure.
