EURJPY staged a strong rally in recent days to reach a one-month high of 132.29 on January 29. Prices have steadied after hitting that high and are being capped by the 100-day moving average which is now acting as a resistance level. The 61.8% Fibonacci retracement level of the rise from 126.08 to 141.04 (April to June rise) is also in this area acting as resistance.
But if prices break the 61.8% Fibonacci, next resistance lies at the 200-day moving average and the 50% Fibonacci retracement level at 133.55.
The overall trend remains bearish as EURJPY has been falling in a descending channel since June 2015, making lower highs and lower lows as prices fell from 141.04 to 126.15. Prices are currently in the upper half of the channel and also above the key 130 yen level which will act as support to the downside. Below this the 128.00 level will offer support.
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