Since marking a low on the year around 126.90, EUR/JPY has rebounded to 131.70. However, as we wind down the month price action is starting to revive the prevailing downtrend. Let’s take a look at the chart.
The 4H chart shows the bullish correction in the second half of March stalling around 131.50-131.70. At the end of last week, price fell below a rising trendline but stalled around 129. Then, after a pullback failed to push above 130.50, price confirmed the breakout by falling below 129 this week.
Note that price has crossed back under the 100-, and 50-period SMAs while the RSI has broken below 40. This shows revival of the bearish bias, and loss of the short-term bullish momentum we saw recently. As we continue into the second half of the week, EUR/JPY looks poised to slide further towards the 126.90 low.
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