- EURJPY leans to the downside after a defeat
- Technical signals flag more weakness ahead
- Potential support expected at 156.00
EURJPY could not enter the 158.00 territory as the falling 20- and 50-day simple moving averages (SMA) managed to cool upside forces once again. The broken support trendline from March and the short-term resistance line from recent highs cemented that ceiling, increasing the risk for a new bearish wave.
The technical indicators are in line with the bearish expectation. Both the RSI and the MACD are clearly sloping downwards in the negative region. Likewise, the stochastic oscillator is facing a new downturn, all flagging a discouraging session ahead.
If the pair exits the ongoing sideways trajectory below the nearby 156.60 support region, the 156.00 round level might instantly provide some footing. Traders might also pay attention to the 23.6% Fibonacci retracement of the 2023 uptrend at 154.50 before testing the base at 153.00. Failure to pivot there could generate a more aggressive decline towards the 151.20-151.60 area, where the 38.2% Fibonacci mark is placed.
In the bullish scenario, where the price surges above the 158.00 bar, a new battle could take place between the 15-year high of 159.75 and the 160.00 psychological mark. A successful step higher could immediately stall within the 161.35-162.50 constraining zone last seen in August 2008. If the bulls snap the latter too, the uptrend could stretch towards the 165.00 mark, which was also an important barrier during 2008. Then, the door would open for the the upper band of the broad rising channel at 166.20.
Overall, EURJPY has been handling a choppy uptrend so far this year, with the bears expected to take a lead in the short-term. A break below 156.00 could raise selling orders in the market.