EURJPY has been trading sideways for a few months now, with support around 128 and resistance 130.50.
While there’s nothing to suggest the pair will break out in either direction yet, we may soon see the lower end come under some pressure.
We’ve seen some consolidation in the pair over the last week and it’s now approaching key fib levels of the recent highs and lows on the 4-hour chart. This also falls around the upper end of the rising channel it’s been trading within.
A move below the channel could initiate a move back towards the 128 lows. The overall trend in the pair has arguably been slightly bearish in recent months, which could make a run at the lows very interesting.
The 55/89-day SMA band that it broke below back in June has been a ceiling for the pair during rallies since. While it has floated above and below the 200/233-day SMA band over the last couple of months, it remains technically bearish .
A move below 128 would make things very interesting for the pair after such a prolonged period of consolidation.