EUR/JPY Price Prediction: Bulls need to break through the 200-EMA to move higher; 130.30 is the target
Despite the bearish opening gap on Monday, the EUR/JPY has been following the primary component of Dow Theory by remaining above Friday’s low of 128.73. The cross continues to form the higher high and higher low structure, but more filters are needed to complete it. On Monday, EUR/JPY opened at 129.16, close to the 61.8 percent Fibonacci retracement (the distance between Friday’s low and high of 128.73 and 130.30). This is typically used to provide significant support for an asset following a correction. These pullbacks are frequently viewed by investors as a good time to buy. The cross is trading in a narrow range of 129.15-129.43, indicating that the volatility bands are being squeezed.
Despite a ‘higher high and higher low’ structure, EUR/JPY is trading below the 50-period and 200-period Exponential Moving Averages (EMA) on a 15-minute scale, indicating a lacklustre move ahead. After trading in a bullish range of 60.00-40.00, the Relative Strength Index (RSI) (14) has dropped sharply near 30.00.Bulls are keeping an eye on the 200-EMA at 129.51, as a break of it will send the cross higher towards Friday’s high at 130.30 and Wednesday’s high at 130.71, respectively.
On the other hand, bulls may lose control if the spot falls below Monday’s low of 129.15 and approaches Friday’s low of 128.73, followed by Thursday’s low of 127.92.