EURJPY has been moving within a consolidation area since February 22 with upper boundary the 132.20 resistance level and lower boundary the 129.60 support level. It is worth mentioning that the price came under strong pressure following the bounce off the 131.70 barrier on Tuesday’s session and hit the 135.35 support level.
Looking at momentum indicators, in the 4-hour chart, the Relative Strength Index (RSI) is lacking direction below the neutral threshold of 50, suggesting that the market could keep consolidating. The MACD oscillator supports this view in the negative territory and is currently embraced by its trigger line. Moreover, the price is trading near the 20-simple moving average (SMA) in the near-term.
If prices continue to head lower and drop below the 130.35 key level, support should come from the 129.60 low. A slip below this level would reinforce the short-term bearish view and open the way towards the 123.90 level, which has been a major support zone in the past.
However, should an upside reversal take form, immediate resistance will likely come from the 40-SMA around the 131.00 handle. A jump above it could drive the price until the 131.70 resistance barrier.
