EURJPY has rebounded from the 3-year low of 122.06 it touched on March 1 but has found resistance just below the centreline of the Bollinger band. The March 4 high of 125.58 is the nearest resistance for the pair should it attempt to move higher. A climb into the upper half of the Bollinger Band would weaken the bearish bias and put prices within reach of the 50-day moving average.
Looking at the momentum indicators, RSI failed to rise above 50 from the current rebound and the stochastics have already reversed after reaching overbought level. This suggests any further upside momentum is likely to be weak.
Should prices head back down again, the March 1 low is the key support to watch for. A break below this level would strengthen the bearish bias, which is underlined by the downward sloping moving averages.
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