EURJPY has been moving sideways since the soft rebound on the 128.50 support level in the previous couple of days. Currently, the price is moving sharply lower, below 129.00, and is standing below the 20- and 40-simple moving averages (SMAs) in the 4-hour chart, while the technical indicators are signaling further losses. The RSI indicator slipped below the threshold of 50 and the %K line of the stochastic oscillator recorded a bearish crossover with the %D line in the overbought zone.
If the bears manage to take charge, then the expectation is for another test of the 128.50 barrier. A break of this key level, which is the lower boundary of the narrow range, would confirm a downside tendency and may pave the way towards the 127.90 obstacle.
On the flip side, a retest of the upper boundary of 129.50, which overlaps with the 40-SMA is possible. A clear jump above this level would bring the pair above the near-term consolidation area and move towards the 130.85 resistance region, taken from the high on August 30.
To sum up, the market is expected to hold neutral in the short-term and bearish in the medium-term.
