EURJPY has been moving within a sideways channel over the last couple of weeks with upper boundary the 125.05 resistance and lower boundary the 123.40 support. Currently, the price is consolidating below the simple moving averages as well as below the 38.2% Fibonacci retracement level of the downward movement from 133.10 to 118.57.
According to the technical indicators, in the 4-hour chart, the RSI is pointing slightly up below the 50 level, while the stochastic oscillator is strengthening its momentum higher above the oversold zone.
If the market pushes the pair higher above the upper boundary, prices could challenge the 125.55 resistance level, taken from the low on August 17. More advances would likely open the way for the immediate resistance of the 50.0% Fibonacci of 125.85, while traders’ attention could turn on the 127.10 hurdle, identified by the peak on December 27.
On the flipside, if the market manages to turn to the downside again and slips back below the 123.40 support, this could send prices until the 122.80 support level before touching the 23.6% Fibonacci of 122.00.
To sum up, EURJPY has been trading in a narrow range in the short term, however, in the longer timeframe the price remains in a strong bearish structure following the pullback on 133.10.
