EUR/JPY Price Analysis: Extends bounce off 50-SMA towards 131.00

• EUR/JPY retreats from intraday high, consolidates heaviest daily fall in two weeks.
• Sustained U-turn from 50-SMA, firmer RSI keep buyers hopeful.
• Key Fibonacci retracement levels, fortnight-old resistance line test short-term advances.

Having witnessed a dull start of 2022, EUR/JPY regains upside momentum, up 0.35% intraday around 130.80 heading into Tuesday’s European session.

The cross-currency pair dropped the most in two weeks the previous day but couldn’t break the 50-SMA support, around 130.10 by the press time.

The following recovery gains support from the firmer RSI line to direct EUR/JPY buyers towards the 131.00 round-figure before poking 61.8% Fibonacci retracement of October-December downside, near 131.15.

It should be noted, however, that an upward sloping resistance line from December 22, close to 131.45 will challenge the pair’s advances past 131.15.

Meanwhile, a downside break of the 50-SMA level surrounding 130.10, won’t be a green pass for the EUR/JPY bears as the 130.00 psychological magnet and six-week-old horizontal support near 129.65, will act as validation points for the bearish trend.

Following that, the 129.00 and the 128.00 round figures may act as intermediate halts before directing sellers towards December’s low of 127.40.

EUR/JPY: Four-hour chart

Trend: Further upside expected