EUR/JPY stretches higher within the ascending channel.
EUR/JPY is moving higher in the 4-hour chart after finding support at the lower boundary of the ascending channel, which has been holding since January 3. Furthermore, the pair is trading above the 20- and 40-simple moving averages (SMAs) in the 4-hour chart, while the RSI and the MACD are slightly rising in the positive area, suggesting a positive picture for the short term.
If the market pushes the pair higher, the price could re-challenge the immediate resistance of 126.90. More advances could also meet the two-and-a-half-month high of 127.50, identified by the peak on March 1, while an aggressive run above this line and the upper bound of the channel of 128.00 could open the door for the 128.40 level.
On the other side, if the market moves lower in the near term, the pair could touch the 126.05 support and the 40-SMA. In case of an extension lower, the 23.6% Fibonacci retracement level of the up leg from 118.57 to 127.50, around 125.37, could come in focus.
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 ascending channel could bring the bullish outlook back into play.
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