EURJPY is edging sideways within a squeezed consolidation of 126.08-127.33 that has formed within the confines of a larger range of 125.08-127.49. The Ichimoku lines are exhibiting a directionless demeanour and are not conveying any clear signals in directional momentum. Nonetheless, the pair is sustaining its near-term improving tone above the minor tentative trend line pulled from the 125.08 trough, despite the slowed upward pace of the 50- and 200-period SMAs.
The short-term oscillators are transmitting mixed signals in momentum. The MACD is trailing beneath its red trigger line in the positive zone, whereas the RSI is persisting above the 50 threshold. The stochastic %K line pivoted upwards ahead of the 20 mark, promoting a pickup in sentiment.
If buying interest increases, initial resistance could develop from the nearby zone of highs of 127.03-127.12. Successfully overcoming this border, the bulls may then challenge a buffer zone from 127.34 until 127.49, where the market previously peaked. Should the price extend above the 22-month top of 127.49, the pair could examine the 127.67 barrier.
Otherwise, if sellers dip under the red Tenkan-sen line at 126.80, quick support may arise from the 50-period SMA at 126.61. Retreating further, the pair may face a reinforced boundary around the 126.43 trough, where the cloud, a minor trend line, and the 200- and 100-period SMAs have converged. Conquering this, the bears could take a rest at the 126.08 low before challenging the longer-term tentative trend line from the 114.42 low.
The pair has been ranging since the beginning of December 2020. However, the broader outlook remains bullish as long as the pair trades above the trend line drawn from the 3½-year low of 114.42.
Summarizing, EURJPY retains a short-term neutral-to-bullish bias above the 126.43 trough and the minor diagonal line.
