EURJPY turned bullish on the 4-hour chart after breaking out of a recent range and above the July 11 high of 130.76.
Following a consolidation phase that took place around the key psychological level of 130.00 during July 20 until today, prices jumped into the 131.00 handle to hit as high as 131.17 so far.
EURJPY gained upside momentum after RSI started rising yesterday. The short-term outlook is bullish as the uptrend from the June 15 low of 122.39 remains intact and there are no signs of a reversal in the uptrend yet.
A continued move to the upside would target the next major resistance level at 132.00, a level not seen since early 2016. Such a move would strengthen the bullish bias and open the way towards 134.00.
Only a drop back below 130.76 would bring the bias back to neutral. A further decline below the Ichimoku cloud and below recent support at 129.55 would give scope to target support at 128.57 (July 19 low) and 127.43 (June 30 low).
In the short-term, the risk is to the upside based on the bullish market structure. The Tenkan-sen line is above the Kijun-sen line and the market is above the Ichimoku cloud. Meanwhile, RSI remains above 50 in bullish territory.
