EUR/JPY is in a long-term uptrend distinguished by the rising peaks and troughs in price on the weekly chart.The pair’s price has formed a bearish divergence with the Relative Strength Index (RSI) in the current week when compared with the similar high in November 2023. 
Euro versus Japanese Yen: Weekly chartDivergence occurs when price reaches a higher high but the RSI fails to follow. It is a sign of underlying weakness in the asset price and a precursor to a possible correction. In the case of EUR/JPY the new multi-year high reached this week was not accompanied by a higher high in the RSI when compared with the high in November 2023. The divergence is quite acute suggesting a stronger possibility it could indicate a subsequent bearish pullback in price. A natural target for a pullback if it develops would be the red 50-week Simple Moving Average (SMA) at 157.080. If the next week is bearish that would add credence to the view there will be a correction signaled by the divergence.More By This Author:EUR/USD Tests 200-day Average With Key Central Bank Speakers Waiting In The Wings Japanese Yen Languishes Near YTD Low Against USD, Seems Vulnerable To Slide Further AUD/USD Falls Back To Lows Of The Day After Release Of US Data
