EURJPY is bouncing off the area of interest at the 117.00 handle and might be setting its sights on the next upside targets marked by the Fibonacci extension tool. Technical indicators confirm that the climb is likely to gain traction from here.

The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that support areas are more likely to hold than to break. These moving averages are also close to the area of interest or former resistance to add to its strength as a floor.

The 38.2% level is at 118.20 then the 50% level lines up with the swing high, which makes it a strong potential take-profit point. The 61.8% level is near the 119.00 major psychological mark then the 78.6% level is at 119.48 and the full extension is at 120.15.

RSI is turning higher to confirm that bullish pressure is present, but the oscillator is closing in on the overbought zone to reflect exhaustion. Turning lower could signal that sellers could take over and lead to another dip for EURJPY. Stochastic has more room to climb before reflecting overbought conditions, so buyers could stay in control for a bit longer.

The euro is enjoying strong support as economic data from Germany signaled a slight improvement in consumer confidence, although pessimism remains. The ECB Financial Stability Review is coming up next and more signs of improvement could bring more gains for the shared currency.

Meanwhile, the yen is on weaker footing since risk appetite has been in play lately, mostly due to the market attention on human trials for coronavirus vaccines being developed. At the same time, data from Japan such as the BOJ core CPI and all industries activity index have missed expectations, adding downside pressure to the Japanese currency.