After finding support just short of the 101.00 psychological figure, the EURJPY currency pair has advanced by over 100 pips to trade at 102.22 today.  This sets the currency pair up for a pivotal test just short of resistance at the 102.25 resistance barrier.  But, will the current momentum last?

Not likely.  The fact that plenty of resistance exists at this level – accompanied by bearish technical indications – increases the potential for further declines in the pair.  There is a confluence of resistance levels that combines the 102.25 September 23rd session low with the 102.30 38.2% fibonacci level from the recent 104.90-100.90 60-minute timeframe decline.

EURJPY 60-minute Timeframe – Source:  FXTrek Intellicharts

With both resistance being combined, there is higher chance that the barrier will hold, giving way to selling sentiment in the near term.  This idea is being supported by a stochastic oscillator reading that is just short of overbought sentiment – trading at a reading of 78.24.  If the level holds, the price action will likely retest the September 26th session low of 101.93 before testing support at 101.39.

But, should the upside barrier be penetrated (or an hourly close above) at 102.25, there is a chance for the current momentum to continue higher – making its way to as high as 103.33, the 61.8% fibonacci retracement level from the 104.90-100.90 decline.  The barrier coincides with other resistance located at 103.30 or the September 28th session low.