EUR/JPY Price Analysis: Reversal to 140.00 looks possible ahead of BOJ policy

The EUR/JPY pair has sensed a buying interest after a marginal correction to near 139.00 in the Tokyo session. The cross has resumed its upside journey and has surpassed the immediate resistance of 139.30. The asset is gaining strength ahead of the monetary policy announcement by the Bank of Japan (BoJ).

Investors will keep an eye on commentary from BOJ Governor Haruhiko Kuroda amid growing chatters over an exit from the ultra-loose monetary policy by the BOJ.

EUR/JPY has managed to retreat back into the consolidation area placed in a range of 138.84-143.00. The cross sensed a responsive buying action after dropping to near 138.00 last week. A recovery move by the Euro is pushing the asset toward the 20-period Exponential Moving Average (EMA) at 139.56, which might strengthen the shared currency bulls further.

A range shift move by the Relative Strength Index (RSI) (14) from the bearish region of 20.00-40.00 to the 40.00-60.00 territory is indicating that the downside momentum has almost faded now.

For further upside, a break above January 5 low at 139.97 will drive the asset towards January 6 high at 141.45 followed by December 28 high around 143.00.

On the flip side, a downside move below the previous week’s low at 138.00 will drag the cross toward January 3 low at 137.39. A slippage below the latter will expose the asset for more downside toward April 14 low at 135.51.

EUR/JPY four-hour chart