EURJPY has been gaining ground in the short term after it managed to find its feet at the 133.40 region in early August. However, the pair is currently trading above its upper Bollinger band, suggesting that its recent advance might be overstretched.
The momentum indicators are endorsing a positive near-term bias Specifically, the RSI is ticking upwards slightly below the 70-overbought area, while the MACD histogram is strengthening above both zero and its red signal line.
Should buying pressures persist, the pair could encounter initial resistance at the 141.40 region, which has acted both as resistance and support in the last two months. Conquering this barricade, the bulls could aim for the July high of 142.30. A jump above the latter might set the stage for the 7½-year high of 144.27.
To the downside, if sellers re-emerge and push the price lower, immediate support could be provided by the 140.00 psychological mark. Sliding beneath that floor, the price may descend towards the 50-day simple moving average (SMA), currently at 138.30. Failing to halt there, any further declines could then stall at 137.00 before the 135.50 hurdle appears on the radar.
In brief, EURJPY appears to have the necessary momentum to push even higher and extend its bullish short-term structure. However, a dive beneath the 50-day SMA could attract selling interest, shifting the technical picture to neutral.
