EURJPY holds a neutral trend in the medium term as it has been trading within a range during the past 7-weeks. The market is currently trading at the lower end of this range with an intra-day bias that is tilted to the downside.
A break below 131.50 would turn the focus to the downside to target the September 15 low of 130.60. The next support is expected at 129.36 and 127.55.
Only a move above 132.40 would ease immediate downside pressure. Resistance is expected at 131.12. Clearing this level would add further gains towards 133.90, with scope to re-test the October 26 peak at 134.50 at the top of the 7-week range. At this stage, an extension higher would confirm a resumption of the longer-term trend from April.
Risk is tilted to the downside in the near term and technicals are bearish. Ichimoku cloud analysis on the 4-hour chart shows Tenkan-sen and Kijun-sen lines are negatively aligned while EURJPY is trading below the cloud. RSI is in bearish territory below 50. The medium-term neutral trend will likely remain in play as long as support at 131.50 holds firm.
