EURJPY is resting below the 100-day simple moving average (SMA) at 121.36 following the last week’s rally. This is slightly above the 121.30 level, which is the 38.2% Fibo of the down leg from the 123.35 high to a recently produced seven-month low of 120.04. The pair then found support again between 120.80, which is the 23.6% Fibo and 120.77, the five-month low of June 3. Price has moved sideways among the narrowing Bollinger bands and between the flat 50- and 100-SMAs, perched on the mid Bollinger band.
The bands are indicating low volatility, while the MACD is flat with the trigger line in positive zone. The RSI and ADX are also showing a neutral view, where the RSI is hovering above the 50 level and the ADX is suggesting no short-term trend in place.
If selling interest picks up, initial support comes from the 120.90 – 120.77 zone, where the 50-day SMA, 23.6% Fibo and lower band have come together. A continued tumble could bring attention towards the 120.50 support before the low of 120.04.
To the upside, if the mid band holds, the price could attempt to fracture the barrier region of 121.26 – 121.36, where the 100-day SMA, 38.2% Fibo and upper band have become compressed. If surpassed, the 50.0% Fibo level of 121.70 could be reached before the resistance highs unfold.
Summarizing, the short- and medium-term bias is bearish, but a positive run above the 122.30 level would turn the bias neutral again.
