In Friday's session, the EUR/JPY pair is seen consolidating after a significant upward wave which took it near multi-year highs around 171.00, oscillating around the crucial 169.00 level. The stabilization at this junction is particularly corroborated by the proximity to the 20-day Simple Moving Average (SMA) near 169.60 which despite falling beneath, the cross will try to defend it as it serves as a strong support.
The Relative Strength Index (RSI) on the daily chart reads a steady 53 now, reflecting balanced market sentiment between the buyers and the sellers. This neutral RSI implies that the market participants are currently eagle-eyeing further direction before making a move. The daily Moving Average Convergence Divergence (MACD) has recently registered a bearish crossover- an occurrence when the MACD line dived under the signal line. This crossover potentially signals ensuing short-term bearish pressure, opening up possibilities of a tempo correction or further consolidation before resuming the upward march.
However, the broader bullish trend in the EUR/JPY remains unaffected. The support formed by the 100- and 200-day Simple Moving Averages (SMAs) at around 164.00 and 161.00, respectively, form a major bastion against long-drawn bearish movements. Therefore, while recent sessions brought some hope to bear, these movements should be treated as corrective rather than any structural changes in the trend.
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