EURJPY bulls are leading for the eighth consecutive trading day, stretching their spectacular rally to a four-month high of 133.00 on Tuesday.
While the bullish run is not showing any signs of exhaustion in the daily chart, the RSI and the Stochastics are raising some caution as the indicators are comfortably located in the overbought territory, suggesting limited room for improvement. Note the MACD is also hovering near a familiar resistance zone.
The 133.00 psychological level could be an ideal pivot point, but if it fails to act as resistance, the 131.50 barrier from June could immediately take control, preventing any progress towards the 3-year high of 134.11 and the 2017 bar of 134.40. Beyond the latter, buying pressure may accelerate with scope to test the 2017 and 2018 tops registered within the 136.50 – 137.00 area.
If the pair changes course, Monday’s floor of 132.12 may attempt to cool any selling forces before a more aggressive downfall develops towards the 131.21 handle. Lower, the spotlight will fall on the key 130.73 – 130.50 restrictive zone, a break of which would switch the short-term outlook back to neutral.
In brief, buying appetite is still evident in EURJPY, though a slowdown succeeding a strong weekly positive expansion cannot be ruled out.