EURJPY has been moving sideways between support around 156.15 and resistance at 160.75, bouncing off the bottom of the range after a previous attempt and gearing up to create a double bottom pattern.

A move past the neckline around the 158.00 major psychological mark could complete the reversal pattern and give the pair enough upside momentum to climb back to the range resistance.

However, the 100 SMA crossed below the 200 SMA to suggest that the path of least resistance is to the downside or that there’s a chance the selloff could gain traction and break below the range support. If that happens, EURJPY could be in for a slide that’s the same height as the range formation.

Stochastic is on the move up and has room to climb before reaching the overbought zone, suggesting that buyers could stay in control for a little longer. RSI also has ground to cover before reaching the overbought area to reflect exhaustion among buyers, which means that bullish momentum could stay in play as well.

EURJPY could take cues from overall market sentiment, as there are no major releases from both the eurozone and Japan this week. Note, however, that the ECB remains biased towards further easing while the BOJ is leaning towards hiking interest rates again in their next monetary policy decision.

Commentary from BOJ officials, particularly remarks from Governor Ueda, still determine yen direction as his attempts to downplay rate hikes have resulted to some declines in a few days.

In addition, risk-off flows could favor the safe-haven yen if investors remain wary of tariffs announcements from Trump and worsening geopolitical tensions in the Middle East. Still, progress in Russia-Ukraine peace talks could ease conflict in the region and lead to a rebound for the shared currency.