EURJPY is currently rising, touching the 40-simple moving average (SMA), after the rebound on the lower Bollinger Band in the 4-hour chart. The pair has been struggling in an upward sloping channel since January 15 with the technical indicators returning back to the upside. The RSI is pointing up approaching the 50 level, while the %K line of the stochastic oscillator completed a bullish crossover with the %D line.
If the market pushes the pair higher, the price could re-challenge the immediate resistance of 20-SMA, which currently stands around 126.82 and then could hit the 61.8% Fibonacci retracement level of the downleg from 133.10 to 118.57 near the 127.50 resistance level. If the price successfully surpasses this strong region and the upper band of the channel, it could hit towards the 128.40 barrier.
On the other side, if the market moves lower in the near term, the pair could touch the 125.95 support and the 50.0% Fibonacci of 125.85. In case of an extension lower, the ascending trend line could halt bearish movements around 125.30.
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.
