- EURJPY descends below ascending channel
- But 50-day SMA prevents further retreats
- Momentum indicators are tilted to the downside
EURJPY has been in a steady advance since December 2023, peaking at the 2024 high of 163.70 on February 27. Since then, the pair has been undergoing a minor correction breaking below the lower end of its upward sloping channel before finding strong support at the 50-day simple moving average (SMA).
Should the 50-day SMA fail to hold its ground, the pair could decline towards the August-October resistance region of 159.75, which might serve as support in the future. Lower, the February support of 158.06 could act as the next line of defence. Dipping beneath that hurdle, the pair could challenge the January low of 155.05.
On the flipside, if the price bounces back and re-enters its bullish structure, immediate resistance could be met at the January high of 161.85. Conquering that zone, the bulls may aim at the 2024 high of 163.70. Further advances could then stall at the 15-year peak of 164.28.
In brief, EURJPY has been on the retreat in the past few sessions, breaking below its long-term bullish structure before meeting support at the 50-day SMA. Hence, a dive below that barricade could accelerate the downfall.
