EURJPY has been trending higher with rising lows connected by an ascending trend line that’s been holding so far this year. Price is back down to testing this support area that lines up with Fibonacci retracement levels.

In particular, EURJPY appears to be finding support at the 50% Fib around the 159.00 major psychological mark and 100 SMA dynamic support. A larger correction could still reach the 61.8% Fib at 158.35 that’s closer to a former long-term resistance that might hold as a floor.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break. In that case, EURJPY could make its way back up to the swing high at 160.27 or higher.

Stochastic is already pulling higher after reaching the oversold region, confirming that buyers are returning while sellers take a break. The oscillator has plenty of room to climb before reflecting exhaustion among bulls.

RSI is also on the move up without even reaching the oversold area, suggesting that buyers are eager to return. Still, a break below the 200 SMA might signal that a reversal from the climb is in order.

There are no major reports from the euro zone or Japan today, so this pair might keep trading on fundamental cues. Note that data from the euro zone came in somewhat better than expected in the previous week, giving the ECB scope to keep policy unchanged and drop the possibility of rate cuts anytime soon.

Meanwhile, recent figures from Japan appear to have cemented the BOJ’s dovish stance for the time being, dashing hopes of an exit from the central bank’s era of negative interest rates in the near-term.