EUR/JPY reversed higher after it tumbled towards a fresh four-month low of 122.07 this week. The technical picture supports that the slightly bullish correction is likely to continue in the short-term. The MACD is stretching to the upside above its trigger line and the stochastic oscillator is approaching the overbought zone in the 4-hour chart.
Another move to the upside could find resistance at the 40-simple moving average (SMA) currently at 123.00 and the 123.10 resistance. Marginally higher, the 23.6% Fibonacci retracement level of the down leg from 126.80 to 122.07 of 123.20 is coming into focus ahead of the short-term downtrend line near the 123.60 level.
In case of negative pressures, the market could meet support at the 122.07 level while a successful close below this level could see a retest of the 118.57 level, reached on December 2018.
In brief, EUR/JPY has been in a downward movement over the last three month and bears should be waiting for a decline below the 4-month bottom for further selling interest.
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