- EUR/JPY fades bounce off weekly low below 50-SMA, 12-day-old resistance line.
- MACD teases bulls but multiple hurdles stand tall to challenge the upside.
- Poised for further downside until staying below monthly descending trend line.
EUR/JPY fails to extend the bounce off intraday low, as well as the weekly bottom, while easing to 131.70 during early Thursday. In doing so, the cross-currency pair remains below a short-term key resistance confluence even as MACD turns bullish for the first time in the week.
The latest pullback aims for the weekly low surrounding 131.25 before highlighting the 131.00 threshold for sellers. However, any further downside will be difficult unless the quote offers a daily closing below 130.50–45 area, comprising multiple levels since March.
Following that, the 130.00 psychological magnet and April’s low near 129.60 will be the key to watch.
Meanwhile, an upside clearance of the 131.90 hurdle, comprising 50-DMA and a downward sloping resistance line from June 15, will need validation from the 132.00 round figure before claiming the last week’s top near 132.70.
It should, however, be noted that the pair’s upside past 132.70 will be questioned by 200-SMA and one-month-old resistance line, respectively around 132.85 and 133.05.
Overall, EUR/JPY remains on the back foot even as MACD signals an intermediate bounce.
EUR/JPY four-hour chart
Trend: Further weakness expected