EUR/JPY Price Analysis: Trapped within EMAs, the short-term outlook looks sideways

• EUR/JPY turns bullish as it forms a double bottom and a bullish engulfing candle pattern.
• Short term, the EUR/JPY is neutrally biased, trapped within the EMAs.
• EUR/JPY Price Analysis: Bullish above 142.00; otherwise would turn downwards.

EUR/JPY rallied sharply on Monday and formed a bullish engulfing candle chart pattern. A double bottom takes shape as the EUR/JPY is poised to test solid resistance at around the 142.29-47 area. At the time of writing, the EUR/JPY is trading at 142.03.

EUR/JPY Price action

The EUR/JPY daily chart is neutral to upward biased. Nevertheless, the last few days’ price action has opened the door for further gains. Oscillators are mixed, with the Relative Strength Index (RSI) flat at bearish territory, while the Rate of Change (RoC) jumped on Monday’s trading session. Therefore, mixed signals could keep EUR/JPY traders at bay.

Short term, the EUR/JPY climb is pausing nearby the 142.00 mark. The EUR/JPY drew a doji, indicating that buyers/sellers are at equilibrium while oscillators remain bullish. The Relative Strength Index (RSI) at 54 turned flat, while the Rate of Change (RoC) was neutral. Therefore, the EUR/JPY might trade sideways before resuming upwards or downwards.

If the EUR/JPY cracks the 142.00 figure, the pair will test the 100-EMA at 142.35. A breach of the latter will expose the 142.54 as the pair sets to test the 143.00 mark.

On the flip side, the EUR/JPY first support would be the 50-EMA at 141.88. Once cleared, the pair would tumble to the confluence of the 20-EMA and the pivot point at 141.58 before testing 141.00.

EUR/JPY 4-hour chart

EUR/JPY Technical levels