EUR/JPY has been trading sideways after the drop below the 129.97 resistance level, which currently acts as a major obstacle for the bulls. Currently, the price is moving above the 20- and 40-simple moving averages (SMA) in the 4-hour chart, indicating a possible upside extension. Moreover, the RSI is pointing south above 50 level, while the MACD is moving lower in the positive zone.
A move to the upside may meet resistance around the 129.97 resistance barrier, this being a top recorded on September 5. In case of further upside extensions, the price could re-challenge the 138.85 level, taken from the high on August 30.
On the flip side, if there is a slip below the 20- and 40-SMAs there is an expectation to hit the 128.50 support barrier. Further declines below this level, could then target the area around the 127.90 level, identified by the lows on September 10, which had successfully halted movements during the previous three weeks.
To sum up, the market is expected to hold neutral in the short-term and bearish in the medium-term.
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