EUR/JPY posts limited gains; bullish in the short term.
EUR/JPY has jumped aggressively over the last three straight days, approaching the 40-period simple moving average (SMA) on the 4-hour chart, which is acting as immediate resistance for the bulls. However, the short-term technical indicators are bearish and point to more weakness in the market even though the price remains above the red Tenkan-sen and the blue Kijun-sen lines. The RSI is sloping slightly down around 50
If the market pushes the price even lower and drops below the 23.6% Fibonacci retracement level of the up leg from 118.57 to 127.50, near 125.37 could hit the immediate support line of 20-SMA currently at 125.15. More downside pressures could drive the pair until the latest low around 124.20 and the 38.2% Fibonacci of 124.08.
On the flip side, in case of a sharp jump above the 40-period SMA and the 125.85 resistance, this could send prices towards the 126.90 resistance level, before moving even higher until the two-and-a-half-month high of 127.50 registered on March 1.
To sum up, EUR/JPY remains in a bullish mode in the short-term after the strong pullback on the 21-month low of 118.57 on January 3.
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