EURJPY remains in a 3-month neutral phase but in the short-term the pair is bullish. On the 4-hour chart, the market is testing key resistance at 134 which is the top of the medium-term range. Near-term upside momentum has faded as can be seen by the RSI turning neutral.
EURJPY remains firm but if it fails to make a daily close above the key 134 level today, then the likelihood of additional gains will diminish. The market could see a pullback and remain trapped in the medium-term range in which it has been trading in since September above what is a strong base at 131.
EURJPY is expected to maintain a bullish bias in the near term since trend indicators on the 4-hour chart are bullishly aligned. The 50-period MA is above the 200-period MA, while RSI is in bullish territory above 50. However, both RSI and stochastics are in overbought levels, suggesting the recent rally off 133 is showing signs of weakness.
