EUR/JPY has declined over the past couple of days as the price struggled to jump above the 38.2% Fibonacci retracement level of the down-leg from 137.50 to 124.60. Also, the pair is still developing below the medium-term ascending trend line, which has been holding since February 2.
Momentum indicators in the 4-hour chart though are currently supporting that the negative momentum is likely to strengthen in the short-term. Specifically, the RSI is picking up speed to the downside and the MACD continues to hold below its trigger line. As a side note, the Bollinger bands are following the price action and seem to be ready to create a sideways channel.
On the downside, a decline could meet the 40-simple moving average (SMA) in the 4-hour chart, which overlaps with the 128.40 support. A slip below this level, the price could retest the 23.6% Fibonacci of 127.66.
Should the price decisively close above the roof of the descending line and the 38.2% Fibonacci, the next resistance to have in mind is the 130.30 barrier. Further advances above this level, could then target the area around the 50.0% Fibonacci of 131.10 and the 131.37 resistance.
To sum up, EUR/JPY continues the negative bias in the short- and medium-term as the bounce off the diagonal line has driven the pair significantly lower.
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