EURJPY is trading slightly below the 50% Fibonacci retracement level of the downleg from 133.10 to 118.57, around 125.85, surpassing the bullish crossover of the 20- and 40-simple moving averages in the 4-hour chart. The pair has been struggling in an upward sloping channel since January 15 with the technical indicators remaining in the positive area. The RSI is pointing marginally up, while the MACD stands above trigger line.
If the market pushes the pair higher, the price could re-challenge the immediate 50.0% Fibonacci level and the 125.95 resistance area. More advances would likely open the door for the 127.10 resistance, taken from the highs on December 27, erasing the bullishly aligned range.
On the other hand, if the market moves lower in the near term, the pair could touch the 40-SMA and the mid-level of the Bollinger band around 125.00. In case of an extension below this region, the pair could challenge the lower channel line near 124.40. Slightly below this line, the 38.2% Fibonacci of 124.10 could attract attention as well.
Concluding, in the longer timeframe, the price remains in a strong bearish structure following the pullback on 133.10 and only an advance above the 61.8% Fibonacci near 127.60 could confirm a bullish correction mode.
