- EURJPY is preparing to test the recent 165.34 high
- The growing intervention threat is limiting the aggressive bullish appetite
- Momentum indicators maintain some degree of bullish tendency
EURJPY is edging higher today with the bulls apparently preparing to challenge the recent 165.34 high following another false attempt by the bears to push this pair below the December 7, 2023 ascending trendline. The continued verbal commentary from Japanese officials, the countdown to this week’s BoJ meeting and the dovish commentary from ECB members are keeping the door open to more volatile sessions ahead, as made evident by the tightening Bollinger bands.
In the meantime, momentum indicators still show a bullish tendency. Specifically, the RSI continues to hover tentatively above its midpoint and, more importantly, the stochastic oscillator is trying to rejoin its overbought territory. However, the Average Directional Movement Index (ADX) remains stuck far below its 25-threshold and thus signals a trendless market.
Should the bulls ignore the intervention threat, they would aim to push EURJPY comfortably above the 165.34 high. They could then gradually try to lead EURJPY towards the July 13, 2007 high at 168.93.
On the other hand, the bears are desperate to recoup part of their significant losses. They could attempt to push EURJPY back below the 164.29-164.97 area and then test the support set by the various simple moving averages employed at 163.19 (50-day SMA) and 160.93 (100-day SMA). If successful, they could then try their luck and determination against the busier 159.64-159.80 range.
To sum up, EURJPY bulls are trying to record a new higher high but the heightened intervention threat and the upcoming BoJ gathering are keeping them on their toes.
