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Technical Analysis – EURJPY rally capped by Ichimoku cloud

EURJPY has found resistance at the bottom of the daily Ichimoku cloud. Last week’s big surge from 130.00 to 135.00 has retraced slightly but found support at 133.55, which is the 50% Fibonacci retracement level of the rise from 126.08 to 141.04 (April to June rise).

Due to the falling and thickening Ichimoku cloud and the market being below the 200-day moving average, further upside momentum looks weak. The RSI has also turned back down before reaching overbought levels. Downside moves will target 131.77 (61.8% Fibonacci) and then the key psychological level at 130.00. Only a daily close above the cloud would shift the bearish bias.

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