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EURJPY pauses downside bias and consolidates

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EUR/JPY has been hovering around the 134.25 level, either below or above it, after bouncing from 130.13.

A further bounce to the upside would be limited by resistance at 137.62, at which point we could see a resumption of a decline. Meanwhile, a move to the downside from current levels would see a retest of the low at 130.13.  A break below this would target the long term Fibonacci retracement level (38.2%) of the upleg from 94.09 to 149.76. This next support level comes in at 128.50.

In the near-term, EURJPY remains bearish below the Ichimoku cloud as can be seen on the daily chart. The tenkan-sen and kijun-sen lines are falling and are negatively aligned.  Although the RSI is in bearish territory below 50, it has recently been rising, as the market bounced from 130.13, suggesting a near – term correction and consolidation.

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