EURJPY changed course to the upside again after almost touching December’s low of 127.48 on Monday, with the price currently testing a close above the 20-day simple moving average (SMA) at 128.30.
The main target is the 23.6% Fibonacci retracement of the latest downfall, which has been blocking bullish actions around 128.80 since the start of the month. But the momentum indicators are questioning whether the bulls have enough power to knock down that wall. The RSI continues to consolidate its latest upturn, unable to extend it above its 50 neutral mark, the Stochastics are drifting southwards again, whereas the MACD keeps deviating above its red signal line but within the negative zone.
Nevertheless, if the price exceeds the 128.80 barrier, the market could gain further buying traction, bringing the 38.2% Fibonacci of 129.70next into view. Another upside move from here could meet resistance near the 50% Fibonacci and the 200-day SMA both around 130.42. A violation at this point is expected to spark buying pressures up to the 61.8% Fibonacci of 131.53.
Alternatively, if the pair holds below the 20-day SMA, the bears may attempt to crack the floor around 127.48 and drive past the 127.00 psychological mark. If that is the case, support could next emerge somewhere within the 126.20 – 125.80 territory.
In brief, EURJPY is looking indecisive in the short-term picture. A decisive step above 128.80 or below 127.48 could direct market sentiment accordingly.
