As we mentioned in previous posts, EURJPY upside potential is limited as price is very close to the resistance of the upper channel boundary and the momentum is weakening. The RSI has provided bearish divergence signals and today we observe a turn to the downside of the short-term price slope.
Blue lines- Bullish channel
EURJPY has potential of moving lower towards the lower channel boundary. At current levels I prefer to be neutral if not bearish. Price has a lot of chances of pulling back. Technically trend remains bullish as long as price is inside the channel and above 121.30-121. The bearish RSI divergence in the Daily chart usually provides a strong pull back if not a bigger trend reversal. That is why traders need to be cautious.
