EURJPY has been in a neutral phase for the past three months as the pair has been trading sideways in the 131-134 area when the uptrend from April to September lost steam.
Looking at the 4-hour chart, EURJPY is capped at the 50-period moving average at 133.33. Support is in the zone between the key 133.00 level and at 133.20 and the market is consolidating recent losses following a reversal just ahead of 134.00.
A sustained break below 133.00 would increase downside pressure and propel EURJPY towards the 200-MA at 132.64 and then to the December 6 low at 132.25. A move lower would push the market towards the lower end of the range.
While immediate downward pressure has eased, a strong recovery cannot be expected in the near term since RSI is flat and showing an absence of momentum in the market. This suggests EURJPY will likely consolidate for now but further weakness cannot be ruled out as long as prices trade below the 50-MA and while RSI is below 50. EURJPY would need to clear 134.00 to shift to a more bullish outlook.