- EUR/JPY has been consolidating in a range of 136.50-138.00 for the past two weeks of trading.
- Momentum oscillator, RSI is looking for a trigger for a decisive move.
- The 200-EMA is advancing modestly higher but lacks conviction.
The EUR/JPY pair gave away half of its gains recorded in the first two hours of the first Asian session. Earlier, the cross struggled to hold above the round figure of 138.00, but firmer price action at the upper bound of consolidation is supporting the Euro bulls.
On an hourly scale, the consolidation phase continues after a strong upside move from the April 27th low at 134.78. The consolidation zone is marked from the April 28 high at 138.00 to the April 29 low at 136.50. Asset prices are overlapping with the 20-period exponential moving average (EMA) at 137.66, signaling consolidation ahead. However, the 200-EMA at 137.20 is moving slightly higher.
Meanwhile, the Relative Strength Index (RSI) is hovering in the 40.00-60.00 range for a longer timeframe, which is looking for a trigger for a decisive move.
If the asset breaks above the previous week’s high at 138.16, the Euro bulls will gain momentum and drive the asset to the April 21 low at 138.81. A break of the latter will send the asset towards the psychological resistance level of 140.00
On the other hand, the yen bulls could dictate the asset if it breaks below the April 29 low at 136.50. This will take the asset down to the April 28th low at 135.44, followed by the April 27th low at 134.78.