EUR/JPY remains on the back foot for the second consecutive day as it takes rounds to the intraday low of 124.67, currently around 124.73, while heading into the European session on Monday.
During the last week, the pair failed to extend its north-run beyond the late-April 2019.
Even so, the quote needs to break an ascending trend line from July 10, at 124.70 now, to revisit July 29 top near 124.30.
Not only the late-July top but July 24 trough near 122.85 and 200-bar SMA level of 122.60 can also lure the sellers past-124.70.
Alternatively, 125.20 and the monthly top near 125.60 could entertain the intraday buyers during the pair’s fresh pullback moves. Though, any more upside past-125.60 will easily break 126.00 to challenge April 2019 top near 126.80.
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The pair recently established a significant spike up, which signals a monumental change in the underlying sentiment. After concluding a significant bearish trend, which was initiated in the wake of the initial market crash in late-March, the price action looks ready to revert its course, and start climbing back up.
Even though the underlying bullish bias is rapidly rising, this does not mean that the bulls could place their buying orders just anywhere. Instead, they might prefer to sit and wait for a new bearish correction to be established before they join the market.
The GBP/NZD has been going up for six consecutive days, which means that with each subsequent day of gains, the likelihood for the emergence of a minor retracement is increased. That is why such potential retracements encapsulate the underlying risk from buying in at the current market price in the near term.
Therefore, the purpose of today's analysis is to examine the crucial price levels associated with the presently emerging bullish trend and to sketch its most likely future progression
As can be seen on the daily chart below, the aforementioned bearish trend is represented by the downwards sloping channel. Once the underlying price action managed to break out above its boundaries, this signalled the termination of the downtrend and the beginning of something new.
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