EUR/JPY surged on Tuesday, gaining over 1%, and currently trades around the 164.00 mark. While the daily outlook remains bullish, overbought conditions on the hourly chart point to a potential short-term correction.
Technical Analysis:
- Daily Outlook: The RSI has moved into positive territory and is approaching overbought levels, suggesting strong momentum.
- Hourly Outlook: The pair is persistently overbought (RSI above 70) with rising green MACD bars, indicating intense buying pressure but a possible near-term pullback due to profit-taking.
- SMAs: The pair trades above key SMAs (20, 100, and 200-day), reinforcing a bullish bias.
Key Takeaways:
- Strong Rally: The recent surge positions EUR/JPY favorably for further gains.
- Potential Pullback: Overbought conditions on shorter timeframes could trigger a temporary corrective move.
- Overall Bullish Trend: Corrections that keep EUR/JPY above key SMAs would likely maintain the positive outlook.