The EUR/JPY currency pair has exhibited a robust bullish trend, reaching 167.85 on Friday, propelled by strong market buying activity. However, indications of overbought conditions in the hourly chart suggest potential transient pullbacks, as short-term sellers increase their presence.
Daily Chart Analysis:
On the daily chart, the Relative Strength Index (RSI) for the EUR/JPY has steadily climbed from 44 to the current reading of 60, indicating sustained bullish momentum predominantly fueled by market buyers. The Moving Average Convergence Divergence (MACD) complements this perspective, with ascending green bars signaling ongoing positive momentum.
Hourly Chart Analysis:
Examining the hourly chart, the RSI exhibits a slight retreat to 53.26 after peaking at 67.40. While this suggests a potential moderation in buying pressure, the MACD, characterized by ascending red bars, hints at the emergence of negative momentum. Despite this shift in the short-term outlook, the overarching bullish sentiment depicted in the daily chart remains unaltered.
Long-Term Perspective:
In the broader context, the EUR/JPY remains positioned above its Simple Moving Averages (SMA) for the 20, 100, and 200-day periods, underscoring the prevailing dominance of buyers in the market.
Conclusion:
The EUR/JPY continues to exhibit a strong bullish trajectory, supported by sustained buying activity. While short-term indicators signal potential pullbacks, the overall outlook remains bullish, with buyers maintaining control over the market. Traders may monitor key support and resistance levels to navigate potential fluctuations in the near term while keeping an eye on the broader bullish trend.
