EURJPY has been showing full compliance to the supportive ascending trendline since the rebound near the 200-day simple moving average (SMA), with the price rising as high as 121.95 on Monday.
While there is still some way to go towards June’s peak of 124.42, the momentum indicators suggest that the bulls may not give up efforts in the short-term; the RSI is comfortably strengthening above its 50 neutral mark, while the MACD, within the positive area, is ready to move beyond its red signal line.
How far the price can run now, may depend on the 122.00 nearby resistance level, which is also the 23.6% Fibonacci retracement of the bullish wave from 114.42 to 124.42. A break at this point, and specifically a close above the 122.60 barrier, could send the pair up to 123.75. Higher, the 124.42 top would be the next target, where any violation could open the door for the 125.00 number.
Alternatively, sellers could dominate if the price retreats below the trendline and the 38.2% Fibonacci of 120.60, pushing support towards the 200-day SMA and the 50% Fibo of 119.42. Another step lower would eliminate hopes of an up-trending market, with the price likely seeking a new lower low somewhere near the 61.8% Fibo of 118.24.
Meanwhile in the medium-term window, the outlook remains neutral as long as the price keeps trading below 124.42.
In brief, EURJPY continues to send positive short-term signals and it would be interesting to see if it can breach the nearby hurdle of 122.00 to extend recovery.
