EURJPY had been in a strong uptrend, which ceased at a fresh 15-year high of 151.60 in early May before the pair corrected lower. Although it quickly found its feet and attempted a rebound, the price failed to revisit its recent multi-year peak, potentially forming a structure of lower highs but also higher lows.
The momentum indicators currently suggest that bullish forces are strengthening. Specifically, the RSI is ascending above its 50-neutral mark, while the stochastic oscillator is approaching its 80-overbought zone.
Should the price jump above the restrictive trendline taken from the pair’s recent highs, immediate resistance could be found at 151.06. A violation of that territory could set the stage for the 15-year high of 151.60. Piercing through that wall, the pair might ascend to form fresh multi-year highs, where the August 2007 support of 153.35 may cap the upside.
Alternatively, if the price bounces off the trendline and reverses lower, the recent support of 148.58 could act as the first line of defense. Trespassing that area, the October resistance of 146.74 might serve as support in the future. Should that barricade fail, the May low of 146.12 could prove to be a tough one for the bears to overcome.
Overall, EURJPY’s latest advance is currently in a critical stage as a failure to cross above the restrictive trendline could lead to a significant pullback. Nevertheless, a break above that crucial zone could open the door for the pair to test its recent multi-year highs.
