- EUR/JPY is oscillating between 20- and 50-EMAs, which indicates a volatility contraction.
- An establishment above the downwards-sloping trendline has strengthened the eurozone bulls.
- For further upside, the asset needs to violate the 137.05-137.31 supply area.
The EUR/JPY pair is aiming gradually higher after a bullish open test-drive move in the Asian session. The cross is continuously facing barricades around the critical resistance of 136.50. On a broader note, the asset is scaling higher after printing a low of 133.39 on Tuesday, has added 2.60% and bulls are still gearing for a fresh rally.
Confident stability above the downward sloping trendline, on a four-hour scale, plotted from July 21 high at 142.33 has strengthened the shared currency bulls. However, the supply zone placed in a 137.05-137.31 range will act as a major resistance ahead.
The 50-period Exponential Moving Average (EMA) at 136.65 is restricting the eurozone bulls from scaling higher while the 20-MA at 136.00 is providing a cushion to the asset. An oscillation of an asset in a mid of 20 and 50-EMAs signals a volatility contraction.
Also, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range, which indicates that the asset is awaiting a potential trigger for a meaningful move.
Should the asset violates the above-mentioned supply zone firmly, the eurozone bulls will drive the asset towards July 26 low at 138.13, followed by July 27 high at 139.51.
On the contrary, the yen bulls could regain strength if the asset drops below Thursday’s low at 135.66. An occurrence of the same will drag the asset towards Wednesday’s low and Tuesday’s low at 134.83 and 133.39 respectively.
EUR/JPY four-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD regains 1.2350 ahead of UK PMIs
GBP/USD is recovering ground above 1.2350 in the European session, as the US Dollar comes under fresh selling pressure on improving risk sentiment. The further upside in the pair could be capped, as traders await the UK PMI reports for fresh trading impetus.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.