EURJPY got trapped between the 20- and 200-period simple moving averages (SMAs) after stepping on the strong ascending trendline, which has been protecting the pair from downside corrections since last October.
The price also refused to breach the floor of its horizontal pattern around 129.60, but the momentum indicators continue to warrant some caution as the RSI seems unable to climb above its 50 neutral mark and the MACD remains muted within the negative area.
A decisive close below the 129.80 – 129.60 zone, where the 50% Fibonacci of the 128.28 – 130.96 is also placed, could cause a sharper decline towards the 61.8% Fibonacci of 129.13. Slightly lower, the 78.6% Fibonacci of 128.85 could immediately catch the fall if the sell-off continues, deterring another steep downfall towards the lows around 128.40. On the upside, the bulls should climb the tough wall within the 130.10 – 130.30 region to meet the crucial resistance of 130.57. Breaking higher from here, the bulls will attempt to claim the top of 130.96 and rally towards the 132.00 round-level.
Summarizing, EURJPY is centered between tough boundaries, facing a neutral-to-bearish bias. A drop below 129.60 or a bounce above 130.57 could determine the next direction in the market.
In fundamentals, the ECB is scheduled to announce its policy decision today at 12:45 GMT.