Technical Analysis – EURJPY still consolidating; unable to break above upper channel

Melina Deltas, XM Investment Research Desk

EURJPY has been consolidating since December and has been stuck within the 23-month high of 127.50 and the 125.15 support. The neutral-to-bullish picture in the medium-term looks to last for a while longer after prices failed to break above the upper channel and the RSI is losing momentum in the positive territory. The MACD oscillator is moving horizontally near the trigger and zero lines.

If prices head higher, resistance should come from 127.50 before taking the pair back to bullish outlook. The next level is the 129.15 barrier, taken from the peak of December 2018 ahead of the 130.20 hurdle, registered in October 2018.

However, should a downside reversal take form, immediate support will likely come from the 20-day and 40-day SMAs around 126.20. A break below these lines could shift the focus to the lower surface of the channel at 125.15, with the next support coming from the 23.6% Fibonacci retracement level of the up leg from 114.40 to 127.50 at 124.40. Below this, the 200-day SMA is the major obstacle at 123.45 before tumbling to 122.80.

To sum up, EURJPY looks neutral in the short-term, though, in the bigger picture, the price is still bullish.