The EUR/JPY pair is facing pressure in extending its recovery move above the immediate resistance of 141.50 in the early Tokyo session. The cross attempted a recovery below 141.00 on Wednesday after a massive sell-off move. The Euro faced immense pressure after the release of the German IFO- Business Climate (Jan) data. The economic data remained in line with the estimates at 90.2 but higher than the former release of 88.6. EUR/JPY snapped two days of consecutive gains and retraced some of its gains as the EUR/JPY clashed with the 100-day Exponential Moving Average (EMA) at 141.83 but could not crack it. Therefore, the cross dived beneath the latter, with Tuesday’s session closing at 141.65. As the Asian session begins, the EUR/JPY is trading at 141.62, registering minuscule losses of 0.04%.

The EUR/JPY remains sideways, even though the pair reached a two-week high at 142.20. Although the EUR/JPY recovered 2% since last Friday, Tuesday’s price action formed a hanging man, suggesting the exchange rates would aim lower. Nevertheless, the EUR/JPY would face a confluence of support areas, like two previous downslope resistance trendlines, around 141.00. Once those trendlines are broken, the next zone of demand tested would be the 20-day EMA at 140.79, ahead of the 200-day EMA at 140.20

However, if buyers can hold above 141.00, a retest to the 100-day EMA at 141.73 is on the cards. A decisive break would expose the 142.00 psychological figure, followed by the January 11 high at 142.85.

Bears to pullback on EURJPY below the DEMAs

Jan 26 2023