By analyzing the daily technical chart one can see that pair is heading towards north side with the formation of bullish engulfing candlestick pattern followed by bullish marabuzo candlestick which is providing us trend reversal signal for the time being.
Political risks are hindering the dollar’s advance, but that is also creating flows into the yen, which is weighing on EUR/JPY’s ability to really take off. EUR/JPY has been sent up to test a critical level of trend line resistance on the daily time frames. Meanwhile, risks are political given the US Justice Department’s allegations against two Chinese nationals which is a spanner in the works with respect Sino/US trade relations. There is also concern over US government funding, with about 25% of the federal government running out of fundind. .
Overall pair is making higher highs and higher lows on the daily technical chart and presently it is trading and sustaining above the crossed moving average lines and a daily closing above 127 level will give us further confirmation of bullish sentiments.
The 127.50 seems as the stumble block for bear and a valid breakout of this level will open the way towards the 128.50 and 130.00 level in near term. On contrary a daily closing below the 125.00 level will confirm the bearish trend. Odds are in favor of bears. Intraday bias remains bearish on the pair. The short term to intermediate picture is mildly bullish.
RSI has arrived into positive territory which is favoring the bulls. A bullish crossover on the MACD indicator is generating bullish signal and providing strength to the bulls, which is a recent development. The 127.50 level is immediate resistance level followed by 128.50 whereas 124.50 levels is strong key support level followed by 123.50 levels.