EUR/JPY has enjoyed an aggressive buying interest over the last two consecutive days following the rebound on the 129.10 support level, which stands near the 38.2% Fibonacci retracement level of the up-leg from 124.60 to 131.97.
Having a look at the 20- and 40- simple moving averages (SMAs) in the 4-hour chart, they are indicating further upside pressure as they posted a bullish crossover earlier today. Also, the RSI indicator is approaching the overbought levels and the MACD oscillator is rising above its trigger and zero lines.
Should prices continue the bullish movement immediate resistance could come at the more than one-week high of the 131.14 level. If the market successfully surpasses this level, it could endorse the upside structure and drive the pair until the 131.97 hurdle, taken from the high on July 17.
If there is a negative rally, the 23.6% Fibonacci mark of 130.23 could provide some support to the pair. Clearing this key level would see additional losses towards the moving averages around the 130.00 psychological level. From here, the price would be on the path to touch the 38.2% Fibonacci of 129.15.
Overall, EUR/JPY has reversed higher after it completed its bearish correction and continues the strong bullish run in the medium-term.
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