EURJPY has traced the lower Bollinger band, extending the retreat in the pair from the 133.47 peak, which has pushed the price below the simple moving averages (SMAs) and towards the 129.61 level that is the 50.0% Fibonacci retracement of the up leg from 125.08 until the near 40-month peak of 134.12. The converged SMAs are not endorsing any definitive direction in the pair.
The short-term oscillators are also transmitting mixed signals in directional impetus. The MACD has distanced itself below its red trigger line and is falling deeper beneath the zero mark, while the RSI is starting to improve in the bearish territory. The stochastic lines are entangled in the oversold region and the %K line has yet to signal any waning in negative forces.
In the negative scenario, the 50.0% Fibo of 129.61 could continue to limit the decline from gaining pace. However, if selling powers overwhelm, the support base from the 61.8% Fibo of 128.54 until the near seven-month low of 127.92 may come into focus. Should this key boundary fail to dismiss negative tendencies, the bears could then dive for the 76.4% Fibo of 127.21.
Otherwise, if buyers build positive traction off the 50.0% Fibo of 129.61, they could encounter an initial tough zone of resistance from the 100-day SMA at 130.16 until the 38.2% Fibo of 130.66. Successfully overcoming these barriers, the price may meet the mid-Bollinger band around the 131.42 obstacle before jumping towards the 23.6% Fibo at 132.00. Gaining more ground, the bulls could then target the nearby 132.55 and 132.91 highs respectively before challenging the upper Bollinger band at 133.18.
In conclusion, EURJPY retains a bearish tone below the SMAs and the 132.55 high. A push beneath the 50.0% fibo at 129.61 could revive negative pressures, while a break above the 131.42 barrier could begin to nourish bullish powers.
