EUR/JPY has been recording a stunning rally over the last five days, creating a new two-week high of 129.57. The sharp buying interest has shifted the near-term bias from negative to positive. Also, the momentum indicators are supportive of the bullish picture.
From the technical point of view, the MACD oscillator completed a bullish cross with the trigger line with strong momentum, while the Relative Strength Index (RSI) is approaching the overbought zone and is sloping upwards.
The price is developing slightly below the 129.50 resistance level, taken from the low on May 16 and in case of a jump above this region, it could drive the pair towards the 130.30 level, 100 pips above the current market price. Further gains could increase the positive momentum and open the way for the 131.37 resistance hurdle.
A move to the downside may meet support around the 20-simple moving average (SMA), 128.20 in the 4-hour chart. Immediate support for further declines may be taking place at 127.15.
The short-term picture is looking predominantly bullish at the moment, with price action taking place above the 20- and 40-SMAs lines after the rebound on the 124.60 level.
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