- The shared currency is climbing in the week by 1.17%.
- Market players’ sentiment turned positive, though it could fluctuate at anytime.
- EUR/JPY Price Forecast: Consolidating, but subject to mean reversion due to the size and speed of the rally; might fall to the 140.00s before resuming upwards.
The EUR/JPY is soaring to 7-year highs, to a level last seen in January 2015, at around 142.06, though the euro bulls are taking a breather as the EUR/JPY remains positive below the 142.00 mark. At 141.88, the EUR/JPY reflects investors’ mixed mood as US equities fluctuate.
Investors’ mood is fragile, fluctuating between positive/negative. Of late, US equities shrugged off worries of the global central bank tightening monetary conditions and the possibility of the US reaching a recession.
Tuesday’s EUR/JPY price action witnessed the cross-currency opening around 141.00. Through the end of the Asian-beginning of the European session, the EUR/JPY rallied sharply towards the 7-year high at 142.06, retreating later to the R1 daily pivot point at 141.50.
EUR/JPY Price Forecast: Technical outlook
From the EUR/JPY daily chart perspective, the cross is upward biased. However, the Bollinger’s band, alongside the Relative Strenght Index (RSI) shows that volatility has increased sharply. In fact, the EUR/JPY is in overbought territory, as shown by the RSI above 70, opening the door for a mean-reversion move before resuming the ongoing bias.
In the near-term, the EUR/JPY 1-hour chart depicts the cross consolidating in the high 141.00s, near the 142.00 area, forming a top that could evolve to a double-top chart pattern. Also, the EUR/JPY exerts pressure on the 20-hour simple moving average (SMA), which, once cleared, would send the EUR/JPY falling towards the 50-hour SMA at 140.94. A break below would expose the 100-hour SMA at 140.07.
Key Technical Levels
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