EURJPY In A Short Downtrend, Bulls Wait Above 126.77

Technical analysis of Forex market

EURJPY is building a downtrend below 127.49 since the start of March, with the pair being set to register another lower high this week around 125.60. The technical picture suggests neutral conditions for short-term trading as the RSI and the MACD hover in neutral territory.

Yet a close above 126.77 would question the short downtrend and boost bullish sentiment, shifting attention straight up to 127.53 and near to the 200-day moving average (MA). An aggressive rally above the latter could increase buying orders significantly, with resistance coming next around the 129.30 restrictive area.

Alternatively, a fall below 124.26 would add confidence to the recent downward pattern, while under the previous low of 123.75, traders may increase their selling positions significantly, driving the price probably towards the January 4 low of 122.38.

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In the medium-term timeframe a strong run above the 200-day MA would put the market back into the bullish mode, while a decisive close below 122.38 would confirm the start of a bearish phase.

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