EURJPY is currently tackling the mid-Bollinger band at 120.90 after a rebound off the 200-day simple moving average (SMA). The deep retracement from the 13-month peak of 124.42 reached the 200-day SMA at the 119.43 level, which happens to be the 50.0% Fibonacci retracement of the up leg from 114.42 to 124.42.
Looking at the short-term oscillators, they appear to back an improving picture in the near-term. The MACD, in the positive region, has flattened below its red signal line, while the rising RSI has improved above the 50 mark. Moreover, the stochastic lines have turned bullish with the %K line’s positive crossover pushing out of the oversold zone. Additionally, the nearing of a bullish crossover between the 100- and rising 50-day SMA could further fuel advancements.
If strong positive price action manages to overcome the mid-Bollinger band at 120.90, resistance could develop at the crucial 122.11 level. Overrunning this, the pair may jump towards the upper Bollinger band at 123.70 before challenging the peak of 124.42.
Otherwise, if sellers steer the price lower, they could be faced with an essential tough support area from the 50.0% Fibo of 119.43 until the 119.03 inside swing high of April 7. This area is fortified by the 200-day SMA and the trough of 119.30. Should sellers conquer this support trench, they could encounter early limitations from another sturdy support region from the 100- to the 50-day SMA (118.65 – 118.25), which includes the 118.52 barrier and the 61.8% Fibo. Should losses extend past 118.08, the 116.85 – 117.00 section could attract attention.
In brief, downside tendencies appear to face congested restrictions below the 200-day SMA. A break above the 122.11 barrier could see a neutral-to-bullish bias returning in the near-term.
