EUR/JPY has been bearish for along time, but it made a reversal in September and has been pretty bullish since then. I say a reversal and not a retrace because this pair broke above the 50 and 100 SMAs on the daily chart, which were providing resistance on the way up, thus defining the trend.

On the H4 chart, the price has moved above all moving averages as well. In September the sentiment improved for no particular reason and this pair climbed higher, while last month the sentiment turned positive after US and China reached a partial trade deal.

As a result, this pair made a strong bullish move by the middle of last month. Although the uptrend stalled and in the last three weeks this pair has traded sideways. The 50 SMA (yellow) provided support briefly and now the 100 SMA (green) has turned into such, as it caught up with the price.

Now EUR/JPY traders are trying to decide, but for the time being this pair is still bullish as long as it stays above the 100 SMA. We could go long from here since stochastic is overbought, which means that the pullback is complete. But if Trump doesn’t cancel September’s tariffs on China,then China might pull off the “Phase One” deal, which would send this pair crashing lower, as safe havens surge. So, we are remaining on the sidelines for now.