EURJPY has been showing signs of bullish momentum, with the bulls gearing up to challenge the recent high of 165.34. However, the looming intervention threat is acting as a roadblock to a more aggressive bullish trend. The verbal commentary from Japanese officials, the upcoming BoJ meeting, and dovish statements from ECB members are all contributing factors to the possibility of more volatile trading sessions ahead. The tightening Bollinger bands serve as a visual representation of the uncertainty in the market.
Even with the bullish sentiment, momentum indicators are painting a mixed picture. The RSI is holding above its midpoint, indicating some degree of bullishness, while the stochastic oscillator is attempting to enter overbought territory. However, the ADX remains below its 25-threshold, signaling a lack of clear trend. This divergence in indicators suggests that the market is undecided about its next move.
If the bulls choose to disregard the intervention threat, their target would be to push EURJPY above the 165.34 high and potentially steer it towards the 2007 high of 168.93. On the flip side, the bears are eager to make up for their losses by trying to push EURJPY below the 164.29-164.97 range. Should they succeed, the next levels of support to watch are at 163.19 and 160.93, indicated by the 50-day and 100-day simple moving averages respectively. A further downward move could bring the market to the 159.64-159.80 range, where the bears will test their resilience.
EURJPY is at a critical juncture, with various factors influencing its price movements. The intervention threat, upcoming central bank meetings, and mixed signals from momentum indicators make it a challenging environment for traders. It is crucial to monitor these developments closely and adjust trading strategies accordingly to navigate the uncertainties in the market.