EURJPY has a more positive bias today after breaking above the shorter-period moving average (20-MA) on the 4-hour chart. There was a bullish crossover of the 20 with the 50-period MA.
The pair’s failure to make a sustained break below the bottom of the medium-term range at 131.50 has kept the market neutral in a sideways pattern since mid-September. The 134.50 level is capping EURJPY to the upside.
EURJPY appears well supported above 131.50 but upside momentum is relatively weak in the short-term, judging by the RSI on the 4-hour chart. There is scope for prices to push higher since risk is tilted to the upside. The target is 133.20, an important resistance area that held after being tested on November 24. A successful breach of this barrier would improve upside momentum and open the way towards 133.87. From here EURJPY could push higher towards the top of the range at 134.50 and then the odds would increase at this point for a resumption of the longer-term uptrend.
Alternatively, EURJPY may lose the current upside momentum and reverse back down towards the bottom of the range at 131.50. This level appears to provide firm support at the moment and thus more sideways trading is expected within the current range.