EUR/JPY Price Analysis: An inverse head-and-shoulders in the 1-hour chart targets 129.40

As the Asian session begins, the EUR/JPY advances during the session, up some  0.26%, trading at 128.54 at the time of writing. On Monday, the shared currency, despite closing in the red, recovered some of last Friday’s losses, bouncing off the daily lows at 127.48, up to reclaim the 128.00 figure, as the market sentiment improved throughout the weekend, on “positive” news regarding the omicron COVID-19 variant, first discovered in South Africa.

At press time, the market sentiment is upbeat, with all the Asian equity futures in the green, except for the Hang-Seng, losing  1.35%. In the FX market, mild risk-on market sentiment benefits risk-sensitive currencies, to the detriment of safe-haven ones, like the Japanese yen and the Swiss franc.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY 1-hour chart displays the formation of an inverse head-and-shoulders a reversal pattern with bullish implications. Furthermore, at press time, the EUR/JPY jumped off the confluence of the 50-hour simple moving average (HSMA) and the neckline, from 128.20s levels towards the November 29 high at 128.67.

In the outcome of breaking above the latter, the following target would be the 100-hour SMA at 128.79, followed by the 200-hour SMA at 129.00. A breach of that level would expose the inverse head-and-shoulders target, at 129.42.