EURJPY Bounces on Support Base Formed in April

Technical analysis of Forex market

EURJPY has found footing for a second time in the vicinity of the support boundary of 129.56-129.78, formed by the lows in April. In spite of this, the simple moving averages (SMAs) are maintaining their bearish bearings, feeding the downward price pressures.

The Ichimoku lines are holding a minor negative bias, while the short-term oscillators are mixed over directional momentum. The MACD, in the negative zone, is edging towards its red trigger line, while the RSI is floating above the 30 level. That said, the stochastic oscillator has regained its positive charge and is promoting stronger traction off the 129.78 upper frontier.

Pushing off the 129.78 level, initial upside friction could occur at the red Tenkan-sen line at 130.10 before buyers face a tough resistance zone existing between the 130.42 high and the 50-period SMA at 130.54. Should upside pressure grow, the price may then meet the 131.00 handle, which overlaps with the cloud’s upper band and the July 13 high. In the event upside momentum recaptures the area above the critical 131.21-131.31 border, the July 6 high of 131.85 could come into focus.

Alternatively, if the price dives beneath the durable base of 129.56-129.78, sellers may target the troughs of 129.17 and 128.82 respectively, from the end of March. Deteriorating further, the bears may challenge the support obstacle of 128.17-128.38.

Summarizing, EURJPY is sustaining a neutral-to-bearish demeanour below the SMAs and the 131.00 hurdle. Yet, a break below 129.56-129.78 would be needed to accelerate the downward pace in the pair.