EUR/JPY fades a recovery from a weekly low below the 50-day moving average and a 12-day-old resistance line.
The MACD teases bulls, but several obstacles loom in the way of the upside.
The price is expected to continue to fall until it falls below the monthly descending trend line.
While retreating to 131.70 in early Thursday, the EUR/JPY fails to continue the comeback from the intraday low as well as the weekly bottom. Even though MACD turns bullish for the first time this week, the cross-currency pair remains below a short-term major resistance confluence.
Before indicating the 131.00 mark for sellers, the latest downturn aimed for the weekly low around 131.25. Any additional decline will be tough unless the quote closes below 130.50-45 on a daily basis, which has comprised many levels since March.
Following that, the psychological magnet of 130.00 and April’s low near 129.60 will be essential to keep an eye on.
Meanwhile, a breakout over the 131.90 resistance level, which includes the 50-day moving average and a downward sloping resistance line from June 15, will require confirmation from the 132.00 round figure before claiming the previous week’s high at 132.70.
The pair’s upside beyond 132.70, however, will be questioned by the 200-SMA and one-month-old resistance line, respectively around 132.85 and 133.05.
Despite MACD signaling an intermediate recovery, EUR/JPY continues on the back foot.
More weakness is likely in the future./n
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