EURJPY in previous sessions bounced in the neighbourhood of the 131.21 low and the 61.8% Fibonacci retracement of the up leg from 129.58 until 134.12, but bullish price action was quickly curbed at the 50-period simple moving average (SMA) around 131.80. While the fresh bearish crossovers of the 200-period SMA are aiding a deteriorating picture, the easing of the 50-period SMA’s downward slope is conveying some doubt in the potency of negative sentiment.
The Ichimoku lines are indicating a pause in bearish momentum, while the short-term oscillators are flashing mixed signals in relation to the price’s preferred directional course. The MACD, below zero, has climbed above its red trigger line, while the RSI is struggling to step above the 50 level. The stochastic oscillators’ %K line has deflected off the 80 level and beneath its %D line, showing that sellers are trying to regain dominance.
To the downside, initial friction could develop from the red Tenkan-sen line at 131.52 ahead of the support belt of 131.21-131.31, the latter being the 61.8% Fibo. If negative pressures intensify and the price is driven past the 131.21 low, the 130.88 barrier may come into focus, while further snowballing in the pair could steer the price to challenge the 130.03-130.26 support boundary.
Otherwise, if buyers take the lead, they could face preliminary resistance at the 50-period SMA at 131.81, adjacent to the 50.0% Fibo of 131.84, where the cloud and blue Kijun-sen line are also currently residing. Overstepping this tough obstacle may propel the pair towards a resistance zone between the 132.24 high and the 38.2% Fibo of 132.38. Should the price defeat the falling 100-period SMA as well, a heavy resistance section of 132.57-132.83 lingers ahead, reinforced by the 200-period SMA.
In conclusion, EURJPY is sustaining a neutral-to-bearish tone below the SMAs. Yet, for a bullish picture to unfold the price would need to conquer the 200-period SMA and the 23.6% Fibo of 133.04.
