EURJPY is significantly higher today as the pair attempts to regain some positive momentum following a week long slide. Prices rose sharply above the 50-day moving average but met resistance at the 61.8% Fibonacci retracement level of the December-February downleg from 124.08 to 118.23.
Further upside moves in the near term are possible as the RSI rose back into bullish territory above 50, though at around 53, the positive bias is not very strong. Should prices extend today’s gains, a break above the 61.8% Fibonacci level at 121.85 would bring the next Fibonacci level into view. The 78.6% Fibonacci level capped EURJPY’s two-week rally at around 122.82 earlier this month. A successful challenge of this level would set the pair on track to target December’s 6-month high of 124.08.
Such a move would reinforce the bullish medium-term outlook, which is in danger of turning neutral if prices continue to consolidate.
On the downside, immediate support should, come from the 50-day moving average, which is currently flat-lining at 121. A drop below this key level would turn the short-term bias back to bearish. Further declines would open the way towards the 38.2% and 23.6% Fibonacci levels at 120.45 and 119.60 respectively.
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