EURJPY has barely improved after the plunge to a 3-year low of 115.43, with the pair erasing on Monday a significant portion of last week’s rally that drove the price as high as 117.76.
The price has also pulled back below the middle Bollinger band and the RSI has failed to climb above its 50 neutral mark, both painting a bearish picture for the short-term.
Immediate support to additional losses could be the 115.85 level that strongly rejected the bears in September and proved somewhat restrictive the past few sessions. If the barrier appears fragile, all attention will turn to the 115.43 bottom, where any decisive close lower would clearly resume the long-term downtrend from February 2018. Still, a more aggressive sell-off could start below the 2017 trough of 114.84 and take a breather probably within the key 112.00-112.60 area.
Otherwise, if the bulls return to the game, the price should maintain strength above the middle Bollinger band and close above the 117.76 resistance to keep buying interest. The spotlight could next shift to 118.55 and then to the 119.00 round-level, though only a rally above 121.10 would lead to a positive direction in the short-term.
In brief, EURJPY is expected to remain under pressure in the short-term, with traders seeking support between 115.85 and 115.43.
