EUR/JPY lost nearly 300 pips during the European trading hours and touched its lowest level in two weeks at 139.25 before staging a rebound. As of writing, the pair was trading at 140.58, where it was still down nearly 1% on a daily basis.

EUR/JPY adds to the weekly pullback and retreats to multi-session lows near 139.00 following the BoJ-Government intervention.

The cross met initial support in the vicinity of the 139.00 neighbourhood, where the 55- and 100-day SMAs coincide. The drop, however, lacked follow through and sparked a rapid rebound to the 140.00 mark and beyond.

Against that, further recovery should not be ruled out just yet and the cross continues to target the YTD peak at 145.63 (September 12) in the relatively short-term horizon.

In the meantime, while above the 200-day SMA at 135.51, the prospects for the pair should remain constructive.

Given the RSI’s rebound from the oversold territory supporting the quote’s latest bounce off the short-term support line, the EUR/JPY is likely to overcome the immediate 100-SMA hurdle near 142.30.

However, the quote’s further upside hinges on the successful break of a downward sloping resistance line from September 12, around 143.60 at the latest.

That said, a clear upside break of the 143.60 hurdle will confirm the falling wedge bullish chart pattern, which in turn suggests the EUR/JPY rally towards 148.00 on a theoretical basis.

Meanwhile, a downside break of the nearly support line, also forming part of the wedge, close to 141.75, will quickly fetch the quote towards the 200-SMA support near 139.70.

EURJPY Enters the Corrective Phase of the Final Trending Impulse

Sep 22 2022

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