The euro plummeted about 2.5% in a matter of minutes during Friday’s North American trading session on suspected intervention by the Japanese economic authorities. The pair retreated from seven-year highs at 148.25 to 144.75 area at the time of writing

In the absence of any relevant fundamental element to justify the move, all signs point out to a market intervention By the Bank of Japan and the Ministry of Finance to protect the Japanese currency.

The EUR/JPY daily chart portrays the pair as upward biased. Worth noting, the cross-currency pair, is reange-bound, trading in the upper 146.00-14730 area, unable to test the 148.00 mark. Of note, EUR buyers were unable to rally to 148.00, probably on fears that the Bank of Japan (BoJ) could intervene in the market, as speculations mounted that on Thursday, they did it. Nevertheless, if those rumors fade, a test to 148.00 is likely, as EUR/JPY buyer eye 150.00.

Short term, the EUR/JPY one-hour chart suggests the pair as range-bound, supported by the confluence of the daily pivot point and the 20-Exponential Moving Average (EMA) at 146.84. Underneath the latter, the 50-EMA flat-slope suggests the pair will remain volatile around the 146.80-147.30 area, but the Relative Strength Index (RSI) aiming lower, about to enter the bearish territory, could open the door for a retest of October 19 lows at 146.07, followed by the October 18, weekly low of 145.81.

On the other hand, if the cross clears the YTDhigh at 147.30, the next resistance is 147.39. Once broken, the following supply areas would be the S2 pivot level at 147.87, followed by the S3 pivot point at 148.44.

Prominent Divergence can be found on Weekly TF

Oct 22 2022