EURJPY reached a 7-week high of 132.60 during Tuesday’s trading session as the pair extended its bullish rally for the second day in a row. In the short-term, prices are capped by the 132.60 resistance level and the upper Bollinger Band. In addition, the 38.2% Fibonacci retracement level of 132.50 of the downleg from 137.50 to 129.00 acts as strong support barrier for the price.
In the 4-hour chart, momentum indicators seem to be in confusion. The RSI indicator is flattening slightly below the overbought level, while the MACD oscillator stands above its trigger and zero lines but with weak momentum.
Should prices reverse lower, immediate support should come at 132.20. A successful close below the aforementioned obstacle would take the pair closer to the 131.70 support level and towards the ascending two-week trend line. In case of a slip below the diagonal line would reinforce the bearish structure again and re-challenge the 23.6% Fibonacci near 131.00, which coincides with the lower Bollinger band.
To the upside, there is immediate resistance at 132.60, while above that, the next major resistance to watch is at 133.00. A break above this zone could push EURJPY until the 50.0% Fibonacci mark of 133.20.
