EURJPY is extending its upward six-week rally near the 123.00 handle. The price is standing above the 23.6% Fibonacci retracement level of the up leg from 114.40 to 124.42 at 122.06, remaining above the 20- and 40-day simple moving averages (SMA).
Technically, the MACD oscillator is strengthening its momentum above its trigger and zero lines, while the RSI is approaching the overbought territory, suggesting more gains.
If the pair continues to tick higher, the 13-month high of 124.42 could be the next crucial target to look at, identified on June 5. Above that lies the 125.20 resistance, taken from the high on April 30 before moving towards the 126.80 strong resistance level.
However, in case of a fall beneath the 23.6% Fibo of 122.06, could retest the 20- and 40-day SMAs currently at 121.35 and 121.17 respectively. Below that, the pair could flirt with the upper surface of the Ichimoku cloud near the 38.2% Fibo of 120.60 ahead of the 120.25 support. More losses could send the bears to reach the 50.0% Fibo of 119.40 shifting the outlook from bullish to neutral.
Summarizing, EURJPY started an upward wave following the rebound on the 119.30 support and it looks predominantly bullish in the short-term timeframe.
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