EURJPY is looking strongly bearish in the short-term after plunging towards a new six-month low earlier today, continuing its selling interest from April 15’s peak of 126.80. Prices dropped below the significant 120.75 barrier and the technical indicators are all pointing to further negative momentum. The RSI is heading downwards, approaching the oversold zone, while the MACD extends its bearish momentum below trigger and zero lines.
Should the pair make another run lower, it is likely to meet support at the 20-month low of 118.55, reached on January 3, which stands around the return line of the medium-term descending channel.
If the negative structure fails to hold and prices turn higher for some bullish movement, the 120.75 could act as immediate resistance for the pair. A potentially more important obstacle though, is the 20- and then the 50-simple moving averages (SMAs) at 121.55 and 121.90 respectively. Even higher, the price could challenge the 122.30 hurdle.
In the bigger picture, EURJPY struggles within a three-month downward sloping channel and investors could turn their eyes towards the next strong level of 118.55. For the outlook to become neutral to bullish, the price needs to penetrate the 122.30 resistance.
