EUR/JPY Price Analysis: Extends recovery firmly to near 141.50

The EUR/JPY pair sensed a significant buying interest after dropping to near the four-day low around 140.80 in the early Asian session. The cross has picked demand ahead of the release of the preliminary German Gross Domestic Product (GDP) (Q4) data, which will release on Monday. The economic data is seen at 0% lower than the prior figure of 0.4% on a quarterly basis.

This week, the event that will keep the asset volatile is the interest rate decision by the European Central Bank (ECB), which will release on Thursday. Considering Eurozone’s roaring inflation, European Central Bank (ECB) President Christine Lagarde will push the interest rates higher by 50 basis points (bps) to 2.50%.

EUR/JPY is displaying rangebound action broadly in a Descending Triangle chart pattern on an hourly scale. The downward-sloping trendline of the above-mentioned chart pattern is plotted from January 25 high at 142.29 while the horizontal support is placed from January 25 low around 140.76. On a broader basis, the south side trendline from January 11 high at 142.61 will act as a major barricade for the Euro bulls.

The recovery move from the horizontal support of the chart pattern has pushed the cross above the 20-period Exponential Moving Average (EMA) at 141.22, which indicates that the short-term trend is turning bullish.

While the Relative Strength Index (RSI) (14) is still oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.

For an upside move, the cross needs to surpass January 25 high at 142.29, which will drive the asset toward January 11 high at 142.61 followed by October 24 low at 143.72.

On the flip side, a break below January 25 low around 140.76 will be a breakdown of the chart pattern, which will drag the asset towards January 5 low at 140.14. A slippage below the same will expose the cross for more downside toward January 17 high at 139.62.

EUR/JPY hourly chart