EUR/JPY Price Analysis: Eurozone bulls need to surpass 144.30 to negate double top

• A double top formation has paused the juggernaut eurozone bulls rally for a while.
• The bearish negative divergence is hinting at exhaustion in the uptrend.
• The 50- and 200-period EMAs are still advancing, which adds to the upside filters.

The EUR/JPY pair has rebounded firmly after a downside move to near 143.52 in the Asian session. It looks like that the cross witnessed a minor correction after sensing exhaustion in the upside rally.

On an hourly scale, the asset has witnessed selling pressure after re-testing its previous highs at 144.25, recorded earlier on June 8. This resembles a double top formation, which indicates a minor pause in the uptrend but needs more filters for claiming it as a bearish reversal.

Also, the cross has displayed a bearish negative divergence while testing its previous highs in which the asset forms a higher high while the momentum oscillator records a lower high.  The Relative Strength Index (RSI) (14) has displayed a bearish negative divergence that signals a loss of the upside momentum.

The 50- and 200-period Exponential Moving Averages (EMAs) at 141.90 and 143.28 are advancing, which favors a bullish bias.

A decisive move above June 8 high at 144.25 will negate the double top formation, which will drive the asset towards the 5 January 2015 high at 144.61, followed by the 23 December 2013 high at 145.70.

Alternatively, the yen bulls could regain strength if the asset drops below Wednesday’s low at 142.68. This will drag the asset towards Tuesday’s low at 141.95. A violation of Tuesday’s low will expose the asset to more downside towards June 15 high at 141.50.

EUR/JPY hourly chart