Technical Analysis – EURJPY pauses its rise in an upward sloping channel

Melina Deltas, XM Investment Research Desk

EURJPY has been developing within an upward sloping channel over the last couple of weeks, surpassing the simple moving averages (SMAs) in the 4-hour chart. However, the technical indicators are losing some momentum. The RSI is pointing south near 50 level, while the MACD is moving sideways above the zero line.

A pull back may meet immediate support around the 20-period SMA currently at 121.45 while slightly lower the bears could try to touch the 121.30 support. Should the price retreat under the 40-period SMA too, the 38.2% Fibonacci retracement level of the up leg from 114.40 to 124.45 at 120.60, the lower surface of the Ichimoku cloud and the 100-period SMA could attract attention.

In the positive scenario, the pair could improve above the 23.6% Fibonacci mark of 122.08 to challenge the 122.50 resistance level. The one-year high of 124.45 remains the big highlight.

In brief, EURJPY is expected to continue the north-run in the short-term channel, while in the medium-term, buying interest could advance if the market confirms a jump above the one-year peak.