EURJPY is trailing the upper Bollinger band after the push off the 117.00 handle. Positive sentiment – also displayed in the short-term oscillators – has endured from the 42-month low of 114.423, extending the pair above the established, mostly bearish simple moving averages (SMAs).
Although intact, the pairs’ positive momentum appears to be under negative stress. On the one hand, the MACD in the positive section is distancing itself above its red signal line, while the RSI and stochastics lines are currently displaying weakening signals. Thus, a retracement cannot be ruled out as the RSI is flat below the 70 mark and the stochastic lines are nearing each other in overbought territory.
A continued climb could encounter initial restrictions from the upper Bollinger band at 120.46 ahead of the key highs of 121.13 and 121.38. Surpassing these obstacles could send the pair to meet the 122.03 resistance before the bulls challenge the six-and-a-half month high of 122.86.
To the downside, support may commence from the 200-day SMA at 119.34 and the inside swing high of 119.03. A step underneath could rest at the 118.52 barrier, where the 100-day SMA also is located. Should sellers steer lower, the 117.48 area – where the 50-day SMA and the mid-Bollinger band reside – could come into focus. That said a violation of the 117.00 hurdle could dive the price towards the 115.32 trough increasing worries of resuming the bigger bearish trend.
The very short-term neutral-to-bullish picture maintains optimism. Yet, a break above 122.86 could upgrade the short- and medium-term outlook to bullish.
