EUR/JPY Technical Analysis: Eyes corrective rally on oversold conditions

• The EUR/JPY pair is mildly bid at 127.75 at press time and could soon revisit the psychological level of 128.00, courtesy of oversold intraday conditions and signs of bullish indicator divergence on the short duration charts.

Hourly chart

• The RSI was at its lowest since Aug. 10 a few minutes before press time, meaning the pair was most oversold in three months. As of writing, the RSI is rising from oversold territory. So, a stronger corrective rally could be in the offing.

15-minute chart

• The bullish divergence of the RSI and the falling wedge breakout indicates the sell-off has likely run its course and recovery rally to 128.00 could unfold in the next few hours.

Trend: Bullish