EURJPY out of bearish channel but capped by 200-day moving average

EURJPY has moved out of its one-month bearish channel to bounce towards the key psychological level of 118 this week. Prices turned lower just ahead of 118 as this proved to be an important resistance area. Just below it lies the 200-day moving average which converges with a Fibonacci level. The 38.2% Fibonacci retracement level of the recent downleg from 122.87 to 114.84 is found at 117.90.

Upside momentum has faded as RSI appears to be turning lower and still remains in bearish territory below 50. MACD is below zero and indicates a bearish bias.

Any further downside moves would target the 115 area and the March 17 low at 114.84. From here, another key level at 112 would come into view and would act as an important support area.

The medium-term market structure remains bearish as long as EURJPY is capped below the 200-day moving average. The market would have to rise above the 50% Fibonacci retracement level at 118.85 of the recent downleg in order for EURJPY to shift to a more bullish bias. A move above the 120-psychological level would confirm a change in the trend.