- EUR/JPY takes offers to refresh intraday high while reversing from multi-year high.
- Nine-week-old ascending resistance line restricts immediate upside amid sluggish MACD.
- Convergence of 10-DMA, monthly support line joins upbeat RSI to keep buyers hopeful.
- Upbeat Eurozone CPI, HICP data for August can bolster hawkish bias about ECB and restore upside.
EUR/JPY reveres from the highest level since 2008 as it braces for the Eurozone inflation data for August during early Thursday. In doing so, the cross-currency pair takes a U-turn from a nine-week-long rising resistance line while refreshing the intraday low to 159.30 by the press time.
That said, the first readings of the Eurozone Consumer Price Index (CPI) for August will join the European Central Bank’s (ECB) favorite inflation gauge, namely the Harmonized Index of Consumer Prices (HICP), to direct intraday moves. Given the recent challenges for the global central bankers, a surprise positive in the inflation numbers may allow the EUR/JPY to refresh the multi-year high.
It’s worth noting that the sluggish MACD signals raise doubts about the pair’s further upside and hence downbeat outcomes from the inflation cues won’t hesitate to drag the quote toward the 158.50 support confluence including the 10-DMA and an ascending support line from late July.
However, the RSI (14) appears firmer, not overbought, which in turn joins the Bank of Japan’s (BoJ) dovish bias to put a floor under the EUR/JPY prices near 158.50, a break of which will challenge the previous weekly high of around 156.85.
Above all, the pair buyers remain hopeful unless they witness a clear downside break of a four-month-old rising support line, close to 153.70 at the latest.
On the flip side, the EUR/JPY pair’s recovery needs validation from the aforementioned nine-week-old rising resistance line, close to the 159.80 level, as well as the 160.00 threshold.
Following that, the June 2008 low of around 161.75 will be in the spotlight.
EUR/JPY: Daily chart
Trend: Limited downside expected
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