EUR/JPY made a high of 129.97 on Thursday before closing at 129.35. At the time of writing the pair is trading 0.37% lower to 128.89 and appears to have a further downside. The intraday support levels are at 128.72 and 128.45. The near-term resistance areas at 129.15 and 129.44.

The current price is still above Feb 2020 high and it seems that the correction may not turn into an all-out downwards move. The pair has steadily risen after breaching above the symmetrical triangle pattern and the intraday charts are showing multiple support areas. The SMA-14 is indicating support at 127.81 and the SMA-50 is at 126.74. The pair is also above the mid-Bollinger band which is at 127.42. The RSI has come out of the overbought zone and is currently at 64. The intraday price charts are bullish while the price pattern on the 4-hourly chart is bearish and hints at a further drop which can be well taken for a reasonable long entry. A decent buy would be at or near 128.60 with a target of 50 to 60 pips and a stop-loss at 128.25.

The 129.00 is now likely to act as a stiff resistance area and a weekly closing above this level would put the bulls in a better position to once again challenge the 130.000 mark. On the downside, if the correction extends below 128.20 the pair might enter into a consolidation phase before setting a clear direction.

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By LCMS Traders FX Analysis Team

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