- EURJPY hits new highs, but still close to caution zone
- Next resistance could emerge near 163.00
EURJPY surged to 162.35 on Monday–the highest level since August 2008–surpassing the caution trendline zone, though marginally.
The ongoing upleg seems secure, but the overbought signals from the RSI and stochastic oscillator raise the risk of a negative reversal.
The 163.00 round level, which capped bullish actions back in August 2008, will be closely watched in the coming sessions. If the bulls breach that wall, the pair might power up to the 165.00-165.50 constraining zone last seen in June 2007-August 2008, while higher, the spotlight might turn to the 167.00 bar.
If the price slides back below the 162.00 mark, last week’s base of 161.35 could cancel any drops towards the previous high of 159.75 and the 20-day simple moving average (SMA). A step lower and beneath the tentative support trendline October seen at 159.45 would neutralize the bullish short-term picture, likely motivating another bearish correction towards the 50-day SMA and the 158.00-158.50 restricted territory. If the latter proves fragile too, the pair could experience an aggressive downfall.
All in all, EURJPY must sustain strength above 162.00 and perhaps cross above 163.00 to raise fresh buying traction in the short-term, as downside risks have not entirely faded.
