EURJPY posted three consecutive red days below the 132.70 restrictive area; however, the rebound off the 130.00 psychological level is still in place. The 20- and 40-day simple moving averages (SMAs) have completed a bearish crossover, acting as strong resistance for the bulls. The RSI is mirroring the price action, moving sideways beneath the 50 level, while the stochastic is turning lower from the overbought region.
An immediate support level could come from the lower surface of the Ichimoku cloud, which overlaps with the 23.6% Fibonacci retracement level of the up leg from 121.60 to 134.11 at 131.20 before testing the 130.00 handle. If the bears take the upper hand and send the market even lower, supports could pause the structure at the 38.2% Fibonacci of 129.35 and 129.28. Even lower, the 200-day SMA and the 50.0% Fibonacci at 127.85 could halt bearish movements.
Alternatively, a successful climb above 132.70 and the short-term SMAs could open the door for the more-than-three-year high of 134.11. Rising above the latter level, the January 2018 high at 134.11 could attract attention.
All in all, EURJPY has been in a horizontal to negative mode in the short-term, but a jump above the SMAs could endorse the broader upside tendency.
