EURJPY receded from its latest 18-month peak of 127.06, pausing to some extent its climb from 119.30. The preserved positive demeanour of the Ichimoku lines and the bullish tone of the simple moving averages (SMAs) defend the current positive picture.
Looking at the short-term oscillators, they reflect the recent pullback in price but positive momentum appears to refuse to give in. The MACD, although below its red signal line, remains some distance in the positive region, while the faded RSI persists in bullish territory. That said, the negatively charged %K line is heading towards the 20 level, promoting further losses.
If selling interest increases, initial hardened support may commence from the 124.43 to 124.28 section of key troughs. Slightly beneath, the 50-day SMA at the 124.07 level, where the 23.6% Fibonacci retracement of the up leg from 114.42 to 127.06 happens to be, may prevent a decline from unfolding. If further ground is lost though, the price may rest at the 123.00 handle, in-line with the cloud’s lower band and the July 28 low. Diving under this border, the 38.2% Fibo of 122.22 could then draw focus.
If buyers manage to gain strength, early friction to upside moves may come from the red Tenkan-sen line at 126.13, before they challenge the 126.80 high from April 2019, and the 127.06 fresh top. Breaching these, the 127.49 critical barrier overhead from March 2019, may impede the price from meeting the 128.32 level, that being the 176.4% Fibonacci extension of the down leg from 124.42 to 119.30. Additional advances may then see the 129.24 obstacle from December of 2018.
In brief, the short-term timeframe continues to exhibit a strong bullish picture, safeguarded above the 124.43 low, the SMAs and the Ichimoku cloud.
