EURJPY has jumped aggressively over the last three straight days, approaching the 40-period simple moving average (SMA) on the 4-hour chart, which is acting as immediate resistance for the bulls. However, the short-term technical indicators are bearish and point to more weakness in the market even though the price remains above the red Tenkan-sen and the blue Kijun-sen lines. The RSI is sloping slightly down around 50 level, while the MACD is weakening its momentum near its zero line.
If the market pushes the price even lower and drops below the 23.6% Fibonacci retracement level of the upleg from 118.57 to 127.50, near 125.37 could hit the immediate support line of 20-SMA currently at 125.15. More downside pressures could drive the pair until the latest low around 124.20 and the 38.2% Fibonacci of 124.08.
On the flip side, in case of a sharp jump above the 40-period SMA and the 125.85 resistance, this could send prices towards the 126.90 resistance level, before moving even higher until the two-and-a-half-month high of 127.50 registered on March 1.
To sum up, EURJPY remains in a bullish mode in the short-term after the strong pullback on the 21-month low of 118.57 on January 3.
