EURJPY extended its bearish phase by dropping another leg lower into the 133 handle. The downtrend since January 5 from the high of 136.63 has not shown signs of reversing. RSI on the 4-hour chart is well into bearish territory although close to oversold levels. This suggests some easing in downside pressure for now.
Short-term price action still looks soft and there is a high risk of another extension lower towards 133. This is considered to be a strong support level which saw several tests back in 2017.
Meanwhile, any rebound from current levels is expected to find resistance at 134. Only a move above resistance at 135 would indicate the end of the recent downtrend and would give scope for a test of 136, which was previously a strong support level. As such, it may be a challenge to breach but if successful, EURJPY would likely rise towards the 136.63 peak and beyond.
For now, EURJPY is clearly in a bearish phase with low odds for a rebound past 134 in the near term.
