• EUR/JPY has rallied up to the top of a medium-term range and risks rolling over as the mode extends. 
• MACD momentum is declining steadily suggesting underlying weakness. 

EUR/JPY rises up and almost touches the top of its nine-week range before treading water indecisively as traders await the next catalyst that will decide its future direction. 

EUR/JPY 4-hour Chart 

The pair is probably in a short-term sideways trend and given the guiding principle of technical analysis that “the trend is your friend”, this would suggest an extension of that sideways mode. If so, then the next move for EUR/JPY is likely to be back down towards the base of the range in the 154s. 

However, there are no reversal signs from price yet and so it is too early to say with any confidence that the pair will fall. A break below 161.00 would be required to supply the additional bearish confirmation to confirm such a down leg. The next downside target for EUR/JPY is at about 158.32 and the October 1 as well as September 30 lows. 

The Moving Average Convergence Divergence (MACD) momentum indicator is diverging bearishly with price. Although the MACD is currently declining, price is oscillating, suggesting weak underlying momentum underpins current price action and tilts the odds marginally in favor of more downside.