EUR/JPY loses ground below 125.00; Bollinger band approaches price action.
EUR/JPY is trading slightly lower in the 4-hour chart on Wednesday after finding resistance at the 125.00 psychological level, which is currently near the upper Bollinger Band. Moreover, the pair is trading below the 20- and 40-simple moving averages (SMAs), while the RSI and the MACD are marginally declining in the negative area, suggesting a bearish picture for the short term after the free-fall from the 126.15 level on March 22.
If the market continues the bearish movement in the near term, the pair could touch the 38.2% Fibonacci retracement level of the up leg from 118.57 to 127.50, around 124.10, and the lower Bollinger band ahead of the 123.85 support area. In case of a lower extension, the price could challenge the 123.40 level and the 50.0% Fibonacci of 123.03.
In the alternative scenario, if the market pushes the pair higher, the price could rest near the immediate resistance of 125.00. More advances could also meet the 40-SMA, which overlaps with the 23.6% Fibonacci of 125.37. An aggressive run above this line could open the door for the 126.15 key level.
Note that in the longer timeframe, the price remains in a bearish structure following the pullback on 133.10, but in the short term, only an advance above the two-and-a-half-month high of 127.50 could bring the bullish outlook back into play.
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