EURJPY has been in a downtrend since mid-October when the price peaked at the eight-year high of 148.39. In the short-term, however, the pair has staged a moderate rebound despite the completion of a death cross between its 50- and 200-day simple moving averages (SMAs).
The momentum indicators currently suggest that bullish forces are intensifying. Specifically, the RSI is ticking upwards in the positive zone, while the MACD histogram is strengthening above both zero and its red signal line.
If buying pressures persist, the price could extend its advance towards the September peak of 145.62. Jumping above that barrier, the bulls could aim for the December high of 146.73 before the spotlight turns to 147.75. A break above the latter may set the stage for the eight-year high of 148.39.
On the flipside, if the price reverses lower, initial support could be found at the 142.93 hurdle, which has acted both as support and resistance multiple times in the past four months. Should that floor collapse, further declines could come to a halt at the 142.14 support region. Even lower, the February bottom of 139.54 could provide downside protection.
In brief, EURJPY seems ready to extend its pattern of higher highs as near-term risks remain predominantly to the upside. However, the pair is trading near its upper Bollinger band, hinting that this latest advance could be overstretched.
