EURJPY has advanced considerably since roughly the mid of the previous year, hitting a 29-month high of 135.65 on Thursday. The pair posted a negative gap in the past couple of days but recouped it quickly yesterday, jumping above the 20-day simple moving average (SMA), while today, the market is slightly easing.
Looking at momentum indicators, the RSI is sloping downwards in the positive region, while the MACD is losing momentum below its trigger line in the bullish territory. However, the Bollinger band is following the upside structure of the price.
Should the pair manage to strengthen its upside tendency, the next resistance could come around the 29-month peak of 130.65, which overlaps with the upper Bollinger band before meeting the 133.12 barrier, registered in September 2018.
However, if prices are unable to move higher, the risk would shift to the downside with the lower Bollinger band coming in focus, as well as the 40-day SMA around the 128.45 support. A drop below this level would signal a downside correction hitting the 23.6% Fibonacci retracement level of the up leg from 114.40 to 130.65 at 126.85. The next key support to watch lower down is the 200-day SMA at 125.15.
To conclude, EURJPY is in an ascending movement in the long-term timeframe and any decreases beneath the uptrend line and the 200-day SMA may switch the current view to neutral.
