• EUR/JPY retreats from short-term key resistance confluence, fades previous rebound.
• Steady RSI suggests further weakness targeting 200-SMA, monthly support.
• Bulls have a bumpy road ahead, 138.40-45 acts as an extra filter to the north.

EUR/JPY fails to extend the previous day’s corrective pullback from the 61.8% Fibonacci retracement of April’s run-up, dropping back below 137.00 as traders in Brussels await Wednesday’s bell.

By dropping back towards the intraday low around 136.80, EUR/JPY marks the inability to cross the convergence of the 50-SMA and a fortnight-old descending trend line, around 137.00 by the press time.

Given the steady RSI and multiple failures to cross the aforementioned key hurdle, EUR/JPY prices are likely to retest the 61.8% Fibonacci retracement level surrounding 136.50.

However, the 200-SMA and a horizontal area comprising multiple levels marked since early April, respectively near 136.00 and 135.45-40, will challenge the pair sellers past 136.50.

Meanwhile, the EUR/JPY pair’s successful run-up beyond 137.00 could direct buyers toward the last week’s swing high surrounding 138.00.

Though, the 138.40-45 zone including a fortnight-old horizontal line, could test the further upside ahead of highlighting the April top near 140.00.

EUR/JPY: Four-hour chart

Trend: Pullback expected