The EUR/JPY climbed towards the 20-day EMA as the Asian session got underway on monday, up by a minimal 0.02%, as appetite for riskier assets augmented, courtesy of traders’ expectations for a less aggressive Fed, following the release of US economic data, suggesting economy activity slowed. Also, UK’s tax cut budget has been put aside by the Chancellor of the Exchequer, Kwasi Kuarteng, as it triggered market turmoil. 

From a daily chart perspective, the EUR/JPY is still neutral-to-upward biased, unable to crack above the 20-day EMA, located at 142.12. Even though the pair pierced the 20-day EMA, price action needs to get higher and break the YTD high at 145.63 to pave the way for further gains and shift the bias upwards. Nevertheless, the Relative Strength Index (RSI), even though it persists in positive territory, is almost flat, suggesting that the price is consolidating.

Also EURJPY came under pressure following five consecutive daily advances on Wednesday, including a test of the key resistance zone around 144.00.

The continuation of the rebound from last week’s lows remains well in place for the time being. That said, if the cross extends the breakout of the weekly top at 144.04 (September 20), it could then dispute the 2022 high at 145.63 (September 12).

In the meantime, while above the key 200-day SMA at 136.04, the constructive outlook for the cross should remain unchanged.

EURJPY Under Pressure or Building Bullish Momentum ?

Oct 05 2022