EURJPY has fallen back down to the lower end of its 2-month range. The pair is in a bearish phase in the short-term but neutral in the medium term, trapped between 131.50 and 134.50 since late September.
The sharp drop from the November 15 high of 133.87 appears to have become exhausted and the market looks a little oversold. But since RSI has not quite reached below the 30 (oversold) line there is room for further weakness towards 131.50 and 131.16 at the range low and November 20 low. This zone is expected to offer solid support.
A move above 132.46 (November 20 high) would shift the focus back to the upside with scope to re-test the upper end of the range. Only a sustained move above 134.50 would bring about a resumption of the underlying uptrend that started back in April.
In the bigger picture, EURJPY is consolidating the uptrend and is likely to maintain its neutral stance as long as support at 131.50 holds. The near-term bearish phase appears to have lost downside momentum as RSI is now flat.
