- The bearish divergence of the relative strength index (RSI), as seen in the hourly chart below, indicates the EUR/JPY could be in for a pullback, having rallied more than 300 pips since Aug. 15.
- A break above 128.28 will invalidate the bearish view and may allow EUR/JPY to extend the recent rally toward 50-day moving average (MA) lined up at 128.90.
Hourly chart
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Spot Rate: 128.10
Daily High: 128.27
Daily Low: 127.99
Trend: Bearish
R1: 128.27 (session high)
R2: 128.44 (50% Fib R of 131.99/124.90)
R3: 128.90 (50-day MA)
Support
S1: 127.63 (50-hour MA)
S2: 127.34 (support as per the hourly chart + 5-day MA)
S3: 126.64 (June 19 low)
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