EURJPY has been trending higher on its 1-hour time frame as its lows can be connected by a rising trend line since the start of the month. Price could be in for another pullback to this support level next.

Applying the Fibonacci retracement tool shows that the 61.8% level lines up with the trend line around the 121.15 mark. The 50% level lines up with a former resistance zone that might now hold as support. However, the 38.2% level already seems to be keeping losses in check already.

If so, price could recover to the swing high at the 122.00 major psychological level or higher. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse.

RSI appears to be on the move down to reflect the presence of selling pressure, but the oscillator also seems to be changing its mind halfway. Stochastic is already on the move up to signal a return in bullish momentum.

Mid-tier economic data from the region in the upcoming session are expected to show improvements, which could support the idea that the euro zone is starting to recover from the pandemic. German industrial production, Italian retail sales, and French trade balance are all expected to print better numbers and upside surprises could even mean more gains for the shared currency.

Meanwhile data from Japan earlier in the day has been mostly weaker than expected. A bit of risk aversion is supporting the lower-yielding yen, though, as market participants are focused on the resurgence of COVID-19 cases in several parts of the US and around the globe. After all, this could prompt another wave of restrictions that could spur safe-haven demand.