On the four-hour chart, EUR/JPY formed a V-shape reversal as buyers broke the falling trendline, pushing the pair above the 50-EMA. After trading in a range between 137.901 and 137.059, EUR/JPY is gaining upside momentum to clear the range’s resistance.
If bullish momentum persists, the next resistance can confront the rally around the 200-EMA. Some consolidation around this level is expected as buyers need to gather enough momentum to drive the price higher. If they manage to overstep this hurdle, more buyers will join the party, aiming for 139.334. By overcoming this resistance, the focus will turn to 139.969.
Otherwise, should the 200-EMA succeed in halting the further traction, sellers may target the 50-EMA again, which lines up with 137.059. as a result, the pair is expected to consolidate in a narrowing range between the slow and fast exponential moving averages.
In Tuesday’s trading, momentum oscillators point at a bullish bias in the market. A rising RSI in buying region imply prevailing bullish sentiment. Also, momentum is hovering above the 100-threshold, suggesting the price has more room to rise. Likewise, MACD bars are growing in the positive area, attempting to advance further above the signal line.
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