EURJPY ended Monday in the green, recovering the negative gap and is now challenging the 129.00 psychological level. The pair has been in a descending movement in the short-term timeframe after the pullback of the 133.15 resistance level, but in the broader picture the price has been in a sideways move since June 2021.
Regarding the technical indicators, the RSI is moving with weak momentum in the negative region, while the MACD is strengthening its movement below its trigger and zero lines.
In case the pair changes its short-term direction to the upside, the bulls will probably challenge the 200-day simple moving average (SMA) at 130.30, which is overlapping with the 40-day SMA ahead of the 20-day SMA at 130.65, which provided both support and resistance in the past. A break higher, could last until 131.90 and 133.15 could be another potential obstacle for upward movements.
Alternatively, additional declines may drive the price towards the 128.20 barrier before 127.40 comes into view. Beneath the latter, the 126.10 barrier could be another level in focus, taken from the low in February 2021.Turning to the long-term picture, the pair switched to neutral mode after the rally off 133.15. The moving averages continue to head south and given that the technical indicators are moving lower too, the market’s outlook might get worse in the short-term as well.