EURJPY finds itself ensnared in a tight trading range during the month of September, hovering just below the lofty heights it reached earlier in the year. This consolidation phase has seen the currency pair trade around the 158.00 level, while short-term indicators exhibit a cautiously bullish bias. Let's delve deeper into the dynamics of EURJPY in this intriguing period.
EURJPY embarked on a robust uptrend at the onset of the year, culminating in the establishment of a fresh 15-year peak at 159.75 on August 31st. Since then, the pair has been meandering aimlessly, lacking a decisive direction as it hovers around the 158.00 handle.
Indicators Hint at a Tentative Upside Bias
Despite the prevailing uncertainty, the momentum indicators tip slightly in favor of the bulls, reflecting a neutral-to-positive near-term bias.
Potential Scenarios to Consider
- Bullish Scenario: Should buying interest reinvigorate, the bulls may aim to re-test the recent 15-year high at 159.75. A breakthrough beyond this level could open the door for a surge to fresh multi-year highs. The February 2008 peak of 161.38 could serve as an initial obstacle. If breached, the pair might then set its sights on challenging the April 2008 high of 164.97.
- Bearish Scenario: Conversely, a breach of the 50-day Simple Moving Average (SMA) could expose immediate support at 157.04. This level, having provided robust support twice in September, may serve as a critical pivot point. A sustained drop below 157.04 could trigger a retreat towards the 153.31 level. Further downside pressure might confront formidable resistance at the July low of 151.39.
The Lull Before a Potential Storm
In summary, EURJPY has navigated a sideways path in the past month, seemingly devoid of clear directional cues. As traders contemplate this period of subdued volatility, the question arises: will it be succeeded by a sudden surge in activity, bringing new trends and opportunities to the forefront? EURJPY remains an intriguing pair to watch as market participants await the resolution of its current consolidation phase.