EUR/JPY Continues Uptrend as Resistance Level Looms
The EUR/JPY currency pair continued its upward trend last week, reaching new heights. According to technical analysis, this rally is in line with a theory that suggests the previous decline from 187.93 was a three-wave correction. As a result, the initial bias for this week remains on the upside, targeting the resistance level of 187.42.
A firm break above 187.42 could lead to a retest of the high at 187.93. On the other hand, if the price falls below the minor support of 184.89, it will turn intraday bias neutral and lead to consolidation before another rally can be expected.
Looking at the bigger picture, the rebound from the rising 55-week exponential moving average (now at 180.64) keeps the uptrend from the 2020 low intact. A break above 187.93 would target a projection of 194.88, which is based on the 78.6% Fibonacci retracement of the move from 154.77 to 175.41.
However, if the price sustains a break below the 55-week moving average, it could indicate that the pair is in a medium-term downtrend to 175.41, which was previously a resistance turned support level.