EURJPY is close to break the 120.00 psychological level which is near the 40-period simple moving average (SMA) on the 4-hour chart.
According to the RSI, the market could maintain positive momentum in the very short-term as the indicator is positively sloped near its neutral threshold of 50. Also, the stochastic oscillator posted a bullish crossover within its %K and %D lines in the oversold zone, suggesting an upside correction in the price.
On the upside, the price could attempt to overcome the 38.2% Fibonacci retracement level of the downward movement from 112.85 to 118.36 near 120.08. A successful violation of this barrier could send the price above the Ichimoku cloud and towards the 50.0% Fibo of 120.60. Should traders continue to buy the pair above that level, resistance could then run towards the 120.95 barrier.
A reversal to the downside could find support at the 23.6% Fibonacci around 119.42, while a more aggressive decline could drive prices until the 118.45 level and the four-month low of 118.36.
Looking at the one-month picture, the outlook is negative and only a decisive close above the 61.8% Fibonacci of 121.13 could resume the bullish sentiment. On the other hand, a significant decline below the four-month trough would extend the negative trend.
