EURJPY has been in a prolonged uptrend since early March, generating consecutive multi-year peaks. However, the pair has been consolidating in the last few daily sessions as its rally paused at the eight-year high of 148.39.
The momentum indicators currently suggest that bullish forces are strengthening. Specifically, the RSI has crossed above its 50-neutral mark, while the stochastic oscillator is surging after bouncing at the 20-oversold zone.
Should the positive momentum intensify, the recent resistance region of 147.75 could act as the first line of defence. A break above the latter might then set the stage for the eight-year high of 148.39. Piercing through that zone, the price could ascend to form fresh multi-year highs, where the December 2014 peak of 149.78 could curb further advances.
On the flipside, if sellers re-emerge and push the price lower, initial support could be met at the 145.62 region, which has acted both as support and resistance in the last couple of months. Diving beneath that region, the bears could aim for the recent support of 144.00 before the 141.00 barrier comes under examination. Even lower, the September low of 137.30 could provide downside protection.
In brief, EURJPY appears to be in a consolidation mode, waiting for developments that could provide fresh directional impetus. Therefore, a break above or below its recent range is likely to be followed by a significant move towards the same direction.
