EURJPY has reversed back down again after finding resistance at the 135.80 barrier during yesterday’s and today’s trading sessions. The pair has been developing lower, reaching the ascending trend line, which has been standing since August 18. Additionally, over the last hours, prices broke below the 23.6% Fibonacci retracement level at 135.12 of the up-leg from 127.45 to 137.50.
The pair is recording a slightly upside movement and the short-term momentum indicators seem to be in confusion. In the 4-hour chart, the Relative Strength Index (RSI) is holding in the negative area but is pointing up, while the MACD oscillator is moving lower in the bearish area below its trigger line. Moreover, the 20-simple moving average is sloping to the downside, signaling further bearish movement.
On the downside, if prices continue the bearish rally, there is scope to test the 134.10 support level. Penetrating this key level and the uptrend line could see further downside correction towards the 38.2% Fibonacci mark at 133.65.
If prices reverse higher and climb above 23.6% Fibonacci level, immediate resistance should come at 135.80, which overlaps with the 40-SMA in the 4-hour chart.