EURJPY is looking more neutral over the last 4-hour sessions as prices climbed towards last week’s 5-month high of 133.10 on Tuesday. However, the aforementioned top has been acting as resistance, hence the upside momentum appears to have run out of steam as prices have been attempting and failing to close above 133.10, though there is support from the 20-simple moving average (SMA).
The neutral bias in the near term is also supported by the RSI, which has been flattening above the 50 level, while the MACD oscillator lost its strong positive momentum and dropped below the trigger line.
Should the pair manage to strengthen its upside movement and overcome 133.10, the next resistance could come around the 133.50 – 133.80 zone, taken from the highs on April and February 2018. Above this level, the next target could come from the 134.20 hurdle, identified by the trough on January 30.
However, if prices are unable to break the return line of the short-term ascending channel, the risk would shift to the downside, with the 131.90 once again coming into focus, which coincides with the 40-SMA. A drop below this level would push the pair until the 23.6% Fibonacci retracement level of the upleg from 124.90 to 133.10, around 131.16.
Looking at the near-term picture, EURJPY has been trading within an upward sloping channel since August 15, after the pullback on the 124.90 obstacle.
