EUR/JPY long-term technical analysis
Last month is a vital month for EUR/JPY after the pair breakout above the bearish channel and launched upward to as high as 124.39. Unfortunately, the pair could not secure a close above the long-term resistance at 121.50. It seems the economy reopening put the market back into a bullish track.
However, the bullish sentiment might change as economy reopening face rapid increase of new coronavirus cases. If the cases continue to increase and the longer the time to find a vaccine then we might see a bearish turn in EUR/JPY again.
EUR/JPY closed above the bearish channel and tested 121.50 resistance last month. No close above the 121.50 resistance yet. This month, the pair looks making an upward attempt to break out and close above the resistance. If the pair could close above 121.50, there is a chance for it to continue moving upward and test the 123.30 and 125.00.
EUR/JPY bounced from the top of the channel after retest. The pair is testing the 121.50 resistance level this week. Will the pair breakout and close above the resistance level? Alternatively, will it get rejected, resume bearish movement, and return inside the bearish channel again?
EUR/JPY is at a crossroads as the pair continuously challenging the 121.50 resistance level. There were breakout and rally above the resistance level in the past. However, there is no confirmation yet that the pair will return above the level and move further higher.
At the current time, traders will continue to monitor the pair reaction near 121.50. As long as there is no lower low printed below 119.20, there is a chance for the bull to make a rally.
We are at a crossroads after EUR/JPY breakout above the top of the bearish channel. The pair currently testing the 121.50 resistance level and aiming for a close above it. Without a close above the level, EUR/JPY prone to return to its bearish track.
Short positions near 121.50 could be considered. Long positions will need to wait until breakout and retest of 121.50 happen.