Sentiment for EUR/JPY remains neutral after the pair put a stop to the uptrend and quickly entered a week long range. Between 140.44 and 141.96 the pair has been increasingly choppy, yet the upper and lower limits have been respected all too well each and every time they were tested.
The uptrend for February – March is still technically intact, with the two lows at 140.44 marking the most recent swing low. This recent range, however, points to bullish weakness as EUR/JPY failed to continue towards a higher swing high.
The 200 simple moving average on 4H has finally caught up with the support, adding further strength to this area. A bearish breakout would invalidate the uptrend opening the way down to 139.10, where the next support confluence is located.
If EUR/JPY bounces off of 140.44 it can be seen as a bullish signal, yet only a break above 141.90 will technically confirm the return of the bullish trend towards 143.75 and possibly even 145.66.
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Prepared by Alexandru Z., Chief Technical Strategist at Capital Trust Markets