EURJPY has staged a comeback following a period of weakness during which it temporarily fell below its established bullish channel, originating in June. The resurgence is primarily attributed to the pair's persistent inability to breach the crucial 200-day Simple Moving Average (SMA). If buying pressures continue, the price could revisit the January high of 161.85. A successful breakout above this level may pave the way for the 15-year high at 164.28. Should the pair maintain its upward momentum beyond this point, it might surge further to reach fresh multi-year peaks, with the October 2007 high of 167.72 serving as a potential resistance level.
Possible Downside Scenarios
On the contrary, if the price retraces lower, immediate support might be located at the former resistance of 159.75. This level coincides with the lower boundary of the ascending channel. Further declines could find support around 157.93, a region that has recently alternated between resistance and support. In the event of a more substantial downturn, the October-December support level at 154.34 could act as a critical line of defense.
In summary, EURJPY has managed to halt its short-term decline, with significant support from the 200-day SMA, allowing it to re-enter the Ichimoku cloud. Consequently, the technical outlook remains positive as long as the price remains within the confines of its medium-term bullish pattern. Traders should closely monitor these key levels and potential scenarios for insights into the pair's future movements.
