The EURJPY moved to the highest levels since 2008 a few weeks ago. The high at that time reached when 157.99 – just short of the natural resistance at 158.00.
The last 2 weeks have seen a corrective move to the downside. Around mid-week last week, the price tested the rising 200 bar moving average on the 4-hour chart (green line on the chart below). The price was also down testing the 38.2% retracement of the move up from the May low at 153.164. The price moved briefly below those levels increasing the bearish bias technically. However, momentum to the downside could not be sustained, and the price quickly snapback higher on the failed break. Sellers turned back to buyers.
Over the last 4 or so days the price moved up to retest its 100-bar moving average on the same 4-hour chart (blue line in the chart above). That MA level comes in at 156.298. Sellers leaned against that MA on a test yesterday.
The pair corrected lower today toward the middle of the rising 200-bar moving average below and the falling 100-bar moving average above. The last 4 or so hours have seen a rally back to the upside.
What next?
With the pair between the 2 moving averages, the battle is between the buyers and sellers for short/intermediate control. The winner will be crowned by a break of either of the moving averages. Move above the 100-bar moving average – and stay above – and the buyers are in firm control. Conversely, a move back below the 200- bar moving average, and the sellers are in control.
In between and it’s a battle for control.
Overall, the EURJPY has been trading higher in 2023. As mentioned, the pair reached the highest level since 2008 a few weeks ago. Longer term, that puts the buyers in the driver’s seat. Putting it another way, it is up to the sellers to take back control.
The fall back below the 100-bar moving average was a step in the short-term bearish direction, but getting below the 200-bar moving average is still required to increase that short/intermediate control. Absent that, and the buyers still hold the strongest hand. .
This article was written by Greg Michalowski at www.forexlive.com. Source