EUR/JPY fails to strengthen bullish run; negative movement in progress.
EUR/JPY remains under strong pressure as it has started an aggressive bearish correction since February 2. The price lost more than 30% of its gains since April 2017 as it tried to challenge the 38.2% Fibonacci retracement level at 128.80 of the up-leg from 114.90 to 137.50.
During today’s European session the pair completed two consecutive bearish sessions in the 4-hour chart and slipped below the 23.6% Fibonacci level of the down-leg from 137.50 to 129.30.
From the technical point of view, in the short-term, the MACD oscillator holds in the positive area with weak momentum, while the RSI indicator is flattening above the 50 level, suggesting neutral to negative movement in price action. Despite that, the 20 and 40 simple moving averages are turning to the upside.
In case of further losses, the pair could hit the 130.55 support barrier but needs to fall below the 20 and 40 SMAs. A dip below the aforementioned obstacle could lead the way towards the 129.30 low.
On the flip side, to the upside, the next level to watch is the 132.20 resistance if there is a jump above the 23.6% Fibonacci mark. Rising above this barrier could hit the 38.2% Fibonacci level of 132.45.
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