EURJPY had another constructive week thanks to the ascending trendline that provided strong protection against downside pressures, helping the price to rally towards a 15-month high of 125.19 on Friday.
Despite that, the pair could not successfully claim the 125.00 mark as the 200-period simple moving average (SMA) in the weekly chart is blocking the way higher at the same location.
Hence, there are some doubts about whether the pair can overcome that line and speed up towards the familiar 125.80-126.50 resistance region as technical signals are currently reflecting. The price is trading comfortably above its upward-sloping SMAs and the Ichimoku cloud, while in momentum indicators, the RSI and the Stochastics are moving in the overbought zone but have yet to reverse south. Beyond the 126.50 level, the 127.50 number could be another key barrier to watch.
In case the bullish action fades near 125.00, the price could weaken to find support around the red Tenkan-sen line and the trendline at 123.96. A break lower could confirm additional losses probably till the 20-day SMA and the previous low of 123.00, where any violation would reduce confidence in the ongoing uptrend. Then, the spotlight would turn to the 122.00 level and the 50-day SMA at 121.70.
Meanwhile in the medium-term picture, the outlook switched from neutral to slightly positive after the climb above the 124.42 peak.
Summarizing, EURJPY is looking cautiously bullish as it is fighting a crucial resistance near 125.00. Failure to remove that hurdle could see the price decelerating.
