The EURJPY has been trending to the upside since bottoming on March 7 at 124.374. The pair peaked on Monday at 137.53 for a gain of 1315 pips over the course of 16 trading days.
Since then, the price has traded up and down. Yesterday did close marginally higher. Today is marginally lower but off its low levels.
The move to the downside in the Asian session tested its rising 100 hour moving average (blue line in the chart above). The price did briefly dip below the moving average, but quickly rebounded, and has been able to stay above that moving average since that test.
Note also that the low today stayed above the high from Friday's trade near 134.736.
The current 100 hour moving averages at 135.293 and the current price is at 135.939.
In the short term, the price action over the last three days has been able to give the sellers some moderates comfort comfort. Specifically, the last two days as seen lower highs versus Monday's high. It's a start.
However, there still is a battle going on between the buyers and sellers at the high levels. It would take a move below the 100 hour moving average (at the minimum) to tilt the bias more to the downside. Until then, the trend to the upside remains the more dominant bias.
What does the technical picture look like looking further out on the weekly chart?
Although longs remain the dominant bias, looking at the weekly chart below, traders can better understand the reluctance at the highs this week.
Going back over time, the run to new highs this week stalled right near the high price from 2018 at 137.497. The high price on Monday reached 137.53 just a few pips above that swing high (that high now represent the new high going back to 2015).
Going forward, just like getting below the 100 hour MA is needed to give the sellers more control, getting above the 137.50 level (and staying above) is needed to increase the bullish bias. On a break, the next target on the weekly chart would come in at 138.98 (call at 139.00).Above that and traders would target 141.047 level (call it 141.00).
So buyers are still more in control given the trend move higher, but there is longer term resistance that is also giving sellers some comfort.
The battle lines are drawn. Who will be able to make the next shove?