The pair has been bouncing from last 3-4 days after testing supports at 121.680.
Upswings favoured by momentum that signalled by leading oscillators, but longs accepted only above resistance at 123.1134 (7DMA) as major trend which is is still remains intact.
So short term bulls have to wait until it breaches resistance at 123.1134 levels.
Current prices remain below EMAs despite attempts of bounces, downtrend moving sloping channel so far (see weekly charts).
So, we view the current price rallies as momentary gains as the major downtrend offers more shorting opportunities, yes we are referring about last 3-4 days jump from the lows of 121.680 to the current 123.081 levels.
Currently, on weekly plotting (14) trending near 36 levels (while articulating) with downward convergence to the dipping prices.
on both daily and weekly terms has remained below zero which is territory, so major trend is perceived to be prolonged further in medium run.
Most probable scenario would be that it may show maximum jump upto 125.445 levels and then resume its business (minor resistance) if it breaks immediate resistance at 123.1134 and then slip back again to extend channel.
Option Trade Tips:
Capitalizing on these deceptive rallies, you decide to initiate a put spread at net credits when IVs are reducing which is good news for option writers.
So, go short in 1W (-1%) in the money put with positive theta if you expect that EURJPY will spike up moderately over the next near future but certainly not beyond your imagination, simultaneously, buy 1M at the money -0.5 delta put option.
Notice in this instance that the put we bought is out of the money and the put we sold is in the money with an anticipation of EURJPY could rise or remain unchanged, and there onwards any abrupt fall would be taken care by longs in OTM put and your active longs in spot FX would be protected.