EURJPY opened the week on a neutral note, keeping its footing around the 127.37 level and near the 20-day simple moving average (SMA).
Trend signals remain slightly daunting as the price continues to trade below its simple moving averages (SMAs) and within the Bollinger bands. As regards the market momentum, some optimism seems to be building over an upside correction as the RSI has paused its downtrend and is pointing slightly up, while the MACD is heading above its trigger line in the negative region.
In the event the bulls take control, the immediate 20-day SMA currently at 128.45, will come first into view. A violation at this point may see another challenging battle around the upper Bollinger band and the 40-day SMA at 129.80. If buyers claim that zone this time, the 200-day SMA at 130.50 could immediately add some downside pressure, deterring a continuation towards the 131.40 resistance and 132.90.
Should the bears dominate, driving the price below the 128.00 number, the spotlight will shift to the crucial 127.37 support, where any step lower will put the pair in a bearish position in the medium-term picture, opening the door towards 125.15. The long-term outlook will also face a deterioration if the decline extends below the 122.80 mark.
In brief, although EURJPY continues to face unfavorable trend signals, the odds for an upturn seem to be growing, with the confirmation expected to come above the 200-day SMA at 130.45.
