EURJPY has been developing within a sideways channel over the last month, with upper boundary the 129.28 resistance barrier, and lower boundary the 127.60 support level. Currently, the price bounced off the 23.6% Fibonacci retracement level of the downleg from 133.10 to 126.60, around 128.15.
Technically, in the 4-hour chart, the RSI indicator is moving slightly higher below the threshold of 50, while the stochastic oscillator is moving higher after the bullish crossover within the %K and %D lines.
However, if prices remain below the 23.6% Fibonacci, they could dip towards the lower boundary of the range. A penetration of this level could endorse the negative structure, sending prices until the 127.25 hurdle. More bearish pressures could find support at the 126.60 obstacle.
Alternatively, if the market manages to turn to the upside and overcome the aforementioned strong Fibonacci level, attention could turn to the 128.40 resistance. A clear run above this region, the pair could touch the bearish cross between the 20- and 40-simple moving averages (SMAs) near 128.65. Even higher, the 38.2% Fibonacci of 129.10 could be next level to focus on.
Concluding, the market is predicted to remain neutral in the short-term.
