EURJPY has stalled around 119.80 after plunging from the six-and-a-half month high of 122.86 on January 16. The pair is currently capped by the 20-period simple moving average (SMA) and looks to be loading for another push down. Also backing this view are the downward sloping 20-, 50- and 100-period SMAs and the near completion of a bearish crossover of the 200-period SMA by the 100-period one.
The short-term oscillators suggest that negative momentum may be picking up. The MACD in the negative zone, is above its red trigger line but is starting to flatten, while the RSI is falling in the bearish region. Moreover, in the Stochastics the %K line slipped below the 80 level and its %D line.
If selling persists, a revisit of the fresh two-month low of 119.80 may play out. Pushing past this, the 119.65 low – from November 22 of last year – could impede the bears from reaching a tougher support region from 119.24 – 119.10, involving the trough of November 14 and the bottoms from October 2019 respectively.
If buyers resurface and shoot higher, initial pressure could come from the 20-period SMA at 120.27 and nearby resistance at 120.40. Overhead, the inside swing low of 120.62 could apply some friction ahead of a climb towards the swing high of 121.24, where the 50-period SMA also resides. Clearing this, the approaching bearish crossover around 121.51 may challenge the bulls ahead of the 121.73 obstacle.
Overall, the very short-term bias is bearish with a break below 119.65 reinforcing a short-term neutral-to-bearish bias, while a break below 119.10 would cement a bearish outlook.
