EURJPY is sustaining its upward trajectory above the ascending trendline, currently flirting with the 29-month high of 130.65. The technical indicators provide a mixture of signals. The RSI continues to move towards its 70 overbought mark, while the price itself has yet to reach the upper Bollinger band, suggesting that there is more room for improvement. The MACD is trying to extend its move above its trigger and zero lines.
Given the indecisive mode, traders may remain patient until the pair clearly closes above 130.65, and more importantly, rallies beyond the upper Bollinger band around 131.00. If that is the case, resistance may run up to the 132.00 level and the 133.12 barrier, taken from the peak on September 2018.
On the downside, a break below the 20-day simple moving average (middle Bollinger band) at 129.70 will shift the spotlight towards the 40-day SMA at 129.40 ahead of the uptrend line around 129.20. Therefore, any violation at this point is expected to trigger a more aggressive sell-off, likely towards the 128.45 support and the 23.6% Fibonacci retracement level of 114.40 – 130.65 at 126.85.
In conclusion, EURJPY is looking confused as to the short-term directional bias around its March highs, with traders probably waiting for a decisive move above 130.65 or below 128.45 to act accordingly. Yet, any downside correction may not deactivate the upward pattern in the medium-term picture unless the price dives below the trendline and its previous lows.