EURJPY appears somewhat optimistic despite the recent consolidation in price above the 200-period simple moving average (SMA). Positive signals include the price having moved above the SMAs and the Ichimoku cloud, while the Ichimoku lines stall their positive tone. Furthermore, a nearing bullish crossover of the 100-period SMA by the 50-period one could boost positive sentiment too.
Additionally, the oscillators are leaning slightly towards a positive outcome in the short-term, despite paused positive momentum. The MACD, in the positive region, has nudged above its red signal line, while the RSI hovers in bullish territory. Moreover, the current overbought stochastic oscillator has yet to show signs of weakness.
In the event buyers break the sideways structure to the upside at 121.47, the pair may shoot for the 122.11 high of June 16 prior to challenging the 122.50 – 122.62 resistance band. More gains could be magnetised towards the 123.92 barrier ahead of the 13-month peak of 124.42, and the 124.59 resistance from May 2019 overhead.
Otherwise, if sellers steer lower, early congested support could develop in the vicinity of the 50- and 100-period SMAs (120.74 and 120.58 respectively), where the Ichimoku lines and the cloud currently exist. The area between the bottom of the cloud (low of 120.25) and the 120.10 low – which encapsulates the 200-period SMA, may make attempt to impede the descent from seeing the foundation of the range. Should the 119.80 mark fail to prevent further declines, the 119.30 trough could draw focus before traders target the 118.47 obstacle.
Summarizing, the pair remains neutral-to-positive above the SMAs and the 120.25 low. That said, a break either above 121.47 or below 119.80 could set a clearer direction in the very short-term timeframe.