EUR/JPY traded higher today, after it hit support at 135.25. Overall, the rate continues to be in steep uptrend mode, respecting an upside support line drawn from the low of Mar. 7. In our view, this paints a positive picture and suggests that there is room for further advances.
At the time of writing, the rate is headed towards yesterday’s high of 137.45, the break of which will confirm a forthcoming higher high and could pave the way towards the 139.15 zone, marked by the high of Aug. 21, 2015. If the bulls are not willing to stop there either, then we may see them pushing towards the highs of June 4 and 9, at around 141.10.
Shifting attention to our short-term oscillators, we see that the RSI, already above 50, has turned up again and now looks ready to emerge above 70 soon, while the MACD lies above both its zero and trigger lines. Both indicators detect strong upside speed and support the notion for a trend continuation.
On the downside, we would like to see a dip below 134.75, marked by the inside swing high of Mar. 24, before we start examining a short-term bearish reversal. This could confirm the break below the upside line drawn from the low of Mar. 7, and may initially target the low of Mar. 25, at 133.70. If the sellers are not willing to stop there, then we could see extensions towards the 132.35 territory, market by the low of Mar. 23, or towards the low of Mar. 21, at 131.35.