EURJPY is currently suffering negative stresses, which are attempting to destabilize the steady ascent from the 119.30 low. The price has retreated past the 50-period simple moving average (SMA) at 125.67 and below the Ichimoku cloud, until the 100-period SMA, strengthening negative momentum, something also displayed in the short-term oscillators.
The MACD is fading below its red signal line and the zero mark, while the RSI is receding below the diagonal line in bearish territory. Furthermore, the stochastic oscillator has traced a negative trajectory below the 20 level, promoting additional losses. Nonetheless, some caution is warranted as the SMAs uphold a dictating positive tone.
If selling interest persists, immediate limitations may arise from the 100-period SMA at 125.10 and the 124.87 nearby low, ahead of a critical support zone between the 124.25 and 124.00 troughs. Should the 200-period SMA underneath at 123.74 fail to withstand steeper declines, the pair may rest at the 123.32 barrier before challenging the 122.83 to 123.00 foundation.
Otherwise, in the event buyers manage to drive the pair back above the 50-period SMA and the cloud, initial resistance may originate from the 126.08 obstacle and the 126.45 high. Conquering the 16-month peak of 126.80, the 127.49 border from March 2019 could come into focus. Gaining further ground, the 128.38 level, which is the 176.4% Fibonacci extension of the down wave from 124.42 to 119.30, could be targeted prior to attempting to meet the tough 129.24 peak from December 2018.
Summarizing, if the price were to collapse below the 124.00 – 124.25 support section, the short-term positive structure could be undermined.
