EUR/JPY has come under renewed selling pressure today after it found resistance at the 129.46 level. The price tumbled below the 20-simple moving average (SMA) in the 4-hour chart, indicating further losses. The technical indicators are confirming the strong bearish bias.
Looking at the short-term timeframe, the Relative Strength Index (RSI) dropped aggressively below the 50 level and is approaching with the strong momentum the threshold of 30. Additionally, the MACD oscillator strengthened its negative structure below the zero line but is still moving above the trigger line.
In case of a further sell-off below the one-month low of 128.50, immediate support could be found near the 50.0% Fibonacci retracement level of 128.30 of the upleg from 124.60 to 131.97. Steeper declines could drive the price until the major hurdle of the 61.8% Fibonacci of 127.42.
On the other side, a rebound on the 128.50 support level could push the price higher towards the 38.2% Fibonacci around 129.15. Slightly higher the 129.46 could act as a resistance level for the bulls and in case of a break above it could open the door for the 23.6% Fibonacci of 130.23. It is worth mentioning that the pair needs to surpass the 40-SMA for more upside movements.
Overall, EUR/JPY has been developing within a bearish correction mode since July 17 and the significant negative rally on Wednesday erased the previous days’ gains.
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