Technical Analysis – EURJPY consolidates as bearish tone softens
- Anthony Charalambous
EURJPY buyers are fighting back after recording a one-month low of 128.24, where a support base has developed during this past week. That said, the 200-period simple moving average (SMA) is endorsing a broader neutral bias, while the bearish 50- and 100-period SMAs are defending the descent in the pair. Worth mentioning is a nearing bearish crossover of the 200-period SMA by the 100-period one, which would confirm selling interest has ramped up.
The Ichimoku lines are indicating that downward forces are struggling, while the short-term oscillators are transmitting mixed signals in directional momentum. The MACD, in the negative region, is remaining buoyant north of the red trigger line, while the RSI is encountering some difficulty in overstepping the 50 threshold. The positively charged stochastic oscillator is promoting upside gains in the pair.
If the price pushes over the Ichimoku lines, which are hovering around 128.75, resistance could then evolve around the nearby 128.95 high and the approaching 50-period SMA at 129.10. Not much higher, the cloud’s lower band and the 129.23-129.44 resistance border may prove difficult to conquer. Yet, if the bulls succeed, they could then aim for the 200-period SMA at 129.72, which if breached too, would reinforce upside confidence bringing the 129.96-130.08 resistance barrier into play.
If the Ichimoku lines around 128.75 halt moves higher, sellers may face initial downside limitations from the 128.24-128.42 hardened floor. Sliding below this boundary, the pair could snag at the 128.00 handle as it directs for the 127.30-127.50 upside defence, which extends back until February 2021. A break beneath the support foundation could intensify the bearish bias with a drop headed to the 127.00 mark.Summarizing, EURJPY is exhibiting a neutral-to-bearish tilt and a break below the 128.24-128.42 immediate floor could boost downside tendencies. That said, for the bullish mood to improve, the price would need to climb north of the 130.00 mark.
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