EURJPY is testing the 20-period simple moving average (SMA) again, after it penetrated the neckline of the double bottom pattern to the upside. The price is losing some momentum, holding beneath the 133.50 resistance level and inside the Bollinger bands.
Regarding the technical indicators, the RSI is falling in the positive region, while the MACD is diving beneath its trigger line, suggesting a downside move on price action before heading up again. However, the 20-day SMA crossed the 40- and the 200-day SMAs to the upside in the previous sessions, underscoring the recent bullish phase.
Should the market extend losses, support could be met between the 131.20 support level and the 40- and the 200-day SMAs in the 138.50-138.30 region. A significant leg below this area could send prices towards the 130.05 barrier, which is currently fluctuating near the lower Bollinger band at 129.75.
On the flip side, if the pair bounces up, immediate resistance could be met at the 133.50 level ahead of the upper Bollinger band at 133.90 and the more-than-three-year-high of 134.11.
In the bigger picture, the pair is bullish as long as it holds above the 200-day MA. In case it violates this line, bears could take the upper hand.
