EURJPY is falling in a descending channel since early June 2015 when the pair fell from a high of 141.04 down to a low of 126.15. After touching this low on January 21, there was an attempt to rally to 132.29 but resistance was found at the 100-day moving average (red line). Subsequently the pair reversed back down to fall below the 130.00 psychological mark. This important level has now turned into resistance. Should prices fail to break back above this level and if there is a daily close below this, then the market could be headed towards testing the lower trend-line support of the channel, below 126.00.
MACD is still in bearish territory but approaching the zero line. A move above zero could give some upside momentum to prices. A recovery back above the 130.00 psychological mark is likely to lift EURJPY back towards resistance at the 50-day moving average around 130.50 and then towards the 100-day moving average around 132.00. But if prices remain within the boundaries of the upper trend-line of the channel, then the bias remains bearish.
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