- EURJPY flips backwards to retest familiar support zone
- Trend signals lean to the negative side
- More sellers might show up below 160.70
EURJPY could not sustain its recent recovery attempt above the 162.00 round level, drifting lower to seek shelter near the important support trendline, which came to the rescue on Thursday.
The pair eased back below its 200-day simple moving average (SMA) and the technical indicators are not in the oversold area at the moment, increasing the possibility of additional bearish actions in the coming sessions.
If the pair were to extend its downfall below the examined trendline at 160.70, it could initially pause around the 61.8% Fibonacci retracement of the November-December downfall at 160. Additional declines are expected to be more aggressive, likely squeezing the price towards the 50% Fibonacci of 158.73. If the bears claim the 158.00 round level too, then the door will open for the 38.2% Fibonacci of 157.42.
In the positive scenario, where the price overcomes the 200-day SMA at 161.35, traders may not get very excited unless they see a sustainable rebound above the critical resistance zone of 162.00-162.65. In this case, the pair could spike into the crucial resistance area of 163.37-163.70, where it paused its uptrend. The 15-year high of 164.28 from November 2023 could be the next challenge. If the bulls breach the latter too, they may enjoy a fast rally to 165.85, especially if the 165.00 psychological mark gives way.
Summing up, EURJPY’s short-term outlook has taken a bearish turn following the pullback below January’s highs around 162. Sellers might wait for another negative extension below the nearby support trendline before they declare victory.
