EURJPY has been creating a strong bearish dive since the bounce off the 13-month peak of 124.42, falling back below the 122.00 mark, which stands near the 23.6% Fibonacci retracement level of the upward move from 114.40 to 124.42.
The momentum indicators are losing momentum while in positive territory. The MACD is flattening well above its trigger and zero lines, while the RSI is dropping beneath its overbought region, suggesting a pullback in the short-term.
Further declining movement could send prices towards the 121.20 support, taken from inside swing top of March 25, ahead of the 38.2% Fibonacci of 120.60. Breaching these hurdles, bears could touch the 50.0% Fibonacci of 119.40 and the 119.00 psychological mark, which holds near the 20-day simple moving average (SMA) that posted a bullish crossover with the 40- and 100-day SMAs in the preceding sessions.
Alternatively, a possible rebound on the 23.6% Fibonacci could drive the market higher again until the 13-month peak of 124.42, endorsing the short-term bullish tendency before flirting with the 125.20 top, registered on April 30.
Concluding, despite the latest drop, EURJPY has advanced considerably during the previous week, turning the negative bias to bullish. More gains above Friday’s high could switch the medium-term outlook from bearish to neutral.
