EURJPY found a strong footing around the 200-day simple moving average (SMA) and the 130.50 level despite a flash breakout to 130.00 on Monday, with the price currently looking to re-enter the 131.00 territory.
The pair has retraced more than half of February’s rally and selling tendencies could persist in the short-term as the technical oscillators maintain a negative trajectory. That said, the RSI is currently rejecting any extensions below its 50 neutral mark, while the MACD is still some distance above its red signal line. Hence, any potential declines in the price could be interpreted with some caution.
In the bullish scenario, where the 130.50 floor stands firm and the price crawls above the nearby 131.00 resistance, the rebound could gain extra legs towards the 131.50 barrier. Beyond that, the bulls may attempt to climb above the 132.14 number with scope to test last week’s tough bar of 132.60.
If the 130.50 floor collapses, sellers will push for a close below the 130.00 level, where the 20-day SMA is currently standing. Then, the restrictive 50-day SMA may immediately attract attention around 129.87 before a sharper downfall brings the 129.23 – 129.00 supportive region under examination. If the bears dominate below the latter, the door will open for January’s base of 128.40 – 128.23.
Summarizing, EURJPY is looking cautiously bearish in the short-term picture, with traders probably waiting for a clear close below 130.50 to place their selling orders.
