EUR/JPY Price Analysis: Further downside eyes 138.40 key support

• EUR/JPY takes offers to refresh intraday low, extend pullback from six-week high.
• A convergence of 50-DMA, 100-DMA restrict immediate declines ahead of monthly support line.
• Two-month-old horizontal hurdle adds filters to the north.
• RSI retreat hints at further weakness but bears should remain cautious.

EUR/JPY extends the previous day’s pullback from a six-week high as bears attack 139.00 heading into Monday’s European session. The cross-currency pair’s latest gains could also be linked to the RSI (14) retreat, as well as the recently easing MACD signals.

That said, a joint of the 100-DMA and the 50-DMA, around 138.40, appears a tough nut to crack for the pair sellers.

Even if the quote drops below 138.40, an upward sloping support line from early August, near 137.30 by the press time, could probe the pair’s further declines.

In a case where the EUR/JPY prices drop below 137.30, the odds of witnessing a south-run towards the previous monthly low near 133.40 can’t be ruled out.

On the contrary, upside moves may initially aim for the 140.00 threshold before Friday’s top surrounding 140.75.

Following that, a horizontal area comprising tops marked since early July, near 142.35-40, could challenge the EUR/JPY buyers before directing them to the yearly top marked in July around 144.25-30.

EUR/JPY: Daily chart

Trend: Further weakness expected