EUR/JPY Price Analysis: Pullback from key resistance eyes January top of 131.60
- EUR/JPY snaps three-day uptrend while reversing from late October highs, descending trend line from June.
- RSI pullback from overbought territory also favors further consolidation of gains.
- Previous support, 200-DMA could lure bears, bulls need to cross October highs for conviction.
EUR/JPY justifies the market’s risk-off mood by breaking the 132.00 threshold heading into Friday’s European session.
In doing so, the cross-currency pair takes a U-turn from a multi-day high, as well as a descending trend line from June.
The pullback moves also gain support from the RSI line that recently eased from overbought territory, suggesting further declines on the card.
As a result, EUR/JPY traders can expect further downside towards the January month’s high near 131.60.
However, the previous resistance line from October and the 200-DMA, respectively around 130.70 and 130.50, will challenge the pair sellers afterward. Also acting as a downside filter is the 130.00 round figure.
Alternatively, the aforementioned resistance line from June, near 132.95, will restrict the immediate upside of the EUR/JPY prices.
Following that, the 133.00 round figure and October’s peak of 133.48 will challenge the pair buyers.
EUR/JPY: Daily chart
Trend: Further weakness expected