EURJPY is currently resting on the 50-day simple moving average (SMA) at 125.74 after a bounce off the lower Bollinger band, which is encapsulated within a critical support section of 125.00-125.25. The positive structure is being protected by the 100-day SMA, while the climbing 50- and 200-day SMAs are aiding bullish price action.
That said, directional momentum has dried up and the short-term oscillators are painting a gloomier picture. The MACD, below its red trigger line has slid ever so slightly under its zero mark, while the RSI is dipping back underneath its neutral threshold. The stochastic oscillator is looking increasingly negative, as the %K line is stalling and appears set to plunge below its %D line.
If buyers regain control and push off the 50-period SMA, initial resistance may develop at the mid-Bollinger band, residing at the 126.39 nearby high. More legs may hurl the pair towards the critical 22-month peak of 127.49. Should buyers conquer the upper Bollinger band, residing at 127.49, they could target the 128.32 level, which happens to be the 176.4% Fibonacci extension of the down leg from 124.42 until 119.30.
Otherwise, if sellers manage to dip beneath the 50-period SMA at 125.74, they may then encounter hardened support from the region of 125.00-125.25. Successfully breaking below this boundary, the price could meet the 100-day SMA at 124.71, which if violated, could sink the pair to exam the 123.89 trough.
Summarizing, in the short-term timeframe EURJPY appears to be stuck between the confines of 125.00 and 127.49. A break below 125.00-125.25 may trigger negative pressures while a shift above 127.49 could build confidence in the pair.
