The EUR/JPY finished Thursday’s session flat and remained trading sideways ahead of December’s release of the Japanese Consumer Price Index (CPI). As the Asian session begins, the EUR/JPY is trading at 139.06, almost flat.

The EUR/JPY daily chart portrays the pair as neutral-downward biased, as it remains below the daily Exponential Moving Averages (EMAs). Also, the 20-day EMA at 140.29 is about to cross below the 200-day EMA at 140.14, which would resume the downtrend in the near term. Solid support is found around the last week’s low of 138.01, tested on Thursday, though the EUR/JPY quickly rebounded towards the 139.00 figure.

On an hourly scale, EUR/JPUY has recovered dramatically after forming a Triple Bottom chart pattern. The formation of the aforementioned chart pattern around 138.00 is demonstrating a sheer bullish reversal. The cross has surpassed the 200-period Exponential Moving Average (EMA) at 140.00 in one go and is expected to extend gains further, considering the momentum in the north-side move.

Oscillators-wise, the Relative Strength Index (RSI) in the bearish territory is flat, while the Rate of Change (RoC), portrays buyers losing momentum. Therefore, the EUR/JPY remains sideways, awaiting a possible breakout.

The EUR/JPY first support would be 138.00. A breach of the latter would send the pair aiming towards 137.38, the YTD low, followed by the September 26 pivot low at 137.36. on the upside, the EUR/JPY first resistance would be the 200-day EMA at 140.14, which, once cleared, could expose additional resistance levels. The 20-day EMA at 140.30 would be put in play, followed by the 141.00 figure.

EURJPY Expected to reverse from DEMAS

Jan 20 2023