- EUR/JPY pulls back just before almost reaching the top of a medium-term range.
- It may yet rally to the range ceiling or roll over as the sideways trend extends.
EUR/JPY almost reaches the top of its nine-week-long range before stalling and unfolding a shallow pullback down to the mid 162s.
EUR/JPY 4-hour Chart
Given the shallowness of the pullback there remains a chance EUR/JPY could resume its up move and finally reach the top of the nine-week range in the 163.80s.
However, the Moving Average Convergence Divergence (MACD) momentum indicator is crossing below its signal line, giving a sell signal and this could result in a reversal lower.
The pair is in a short-term sideways trend most probably, which given the guiding principle of technical analysis that “the trend is your friend”, would suggest an extension of the sideways mode. If so, then the next move for EUR/JPY is likely to be back down towards the base of the range in the 154s.
It is too soon to say with any confidence if this will happen, however, as there are no reversal signs from price itself, only the MACD. It is possible EUR/JPY could make a last rally higher before rolling over and beginning a new down leg in earnest. A break below 161.00 would supply additional bearish confirmation such a move was starting.
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