Bulls challenge multi-week trading range hurdle, around 126.70

• EUR / JPY gained strong positive traction and rose to resistance from the multi-week trading range.
• The setup appears tilted in favor of bullish traders and supports the prospects for additional earnings.

The crossing EUR/JPY it gained strong positive traction on Monday and rose to week-long highs around the 126.75 region during the middle of the European session. The aforementioned area marks the upper end of a nearly four-week trading range, which if decisively cleared will mark a short-term bullish breakout.

Meanwhile, the technical indicators on the daily chart maintained their bullish bias and have again started to gain positive traction on the hourly charts. The setup remains firmly tilted in favor of bullish traders and supports prospects for an eventual breakout through the aforementioned range.

That said, relatively weak liquidity conditions warrant some caution for aggressive bull traders. This makes it prudent to wait for some subsequent buying, possibly beyond last week’s high around the 127.00 mark, before positioning for any further short-term appreciation moves.

The EUR / JPY cross could accelerate the positive momentum towards the test of the next big hurdle near the 127.40 region, above which the bulls are likely to point towards the 128.00 recovery.

On the other hand, immediate support is pegged near the horizontal support at 126.25 and is closely followed by the 126.00 mark and the trading range support, around the 125.80 region. Sustained weakness below the mentioned support levels will negate the prospects for further short-term gains.

4 hour chart

Technical levels