- EURJPY climbed to three-week tops, with bulls eyeing a move beyond the 125.00 barrier.
- A convincing breakthrough will set the stage for a move towards the 126.30-40 region.
- Any meaningful dip below the 124.20-15 area might now be seen as a buying opportunity.
- Fresh bullish positions should be accompanied by appropriate stop-loss below mid-123.00s.
Having defended 100-day SMA support, EURJPY rallied to three-week tops on Wednesday amid the heavily offered tone surrounding the safe-haven Japanese Yen. The pair was last seen hovering near the 50% Fibonacci level of the 127.07-122.37 recent slide, which is closely followed by a one-month-old descending trend-line resistance, just ahead of the key 125.00 psychological mark.
Meanwhile, technical indicators on the daily chart have just started moving into the positive territory and are still far from being in the overbought zone on hourly charts. The set-up favours bullish traders and supports prospects for an eventual breakthrough the mentioned barrier. Hence, a move towards 61.8% Fibo. level, around the 125.30 region, now looks a distinct possibility.
Some follow-through buying should pave the way for a further near-term appreciating move, possibly beyond the 126.00 handle, towards testing the 126.30-40 supply zone.
On the flip side, immediate support is pegged near the 124.20-15 region (38.2% Fibo. level) ahead of the 123.85 horizontal zone. Any subsequent weakness might be seen as a buying opportunity and remain limited near the 23.6% Fibo. level, around the 123.45-40 area. The latter should act as a stop-loss level for bulls, which if broken will negate the bullish outlook and turn the pair vulnerable.