- EUR/JPY rises moderately by around 0.07% at the start of the Asin Pacific session.
- Sentiment remains negative, although the JPY weakened as other global central banks began to tighten monetary conditions.
- EUR/JPY Price Forecast: To accelerate towards 140.00, once EUR/JPY bulls recover 139.00.
EUR/JPY extends its rally for the fourth straight trading day due to a weaker Japanese Yen, the weakest currency in Tuesday’s trading session in the FX Complex. At 138.13, EUR/JPY is aiming higher, and the bulls have set their sights around the May 9 daily high at 138.32.
Sentiment remains negative, basically for no reason other than the general strength of the US Dollar, thanks to month-end flows. US stocks closed with losses of between 0.31% and 1.35%. China has reported positive news related to the May Covid-19 outbreak as Beijing and Shanghai prepare to lift some restrictions.
Recently, the European Commission accepted the Russian oil embargo. Earlier, during the European session, inflation in the Eurozone soared to 8.1% YoY, above the estimate of 7.7%
EUR/JPY price action on Tuesday showed the cross dipping to daily lows of 136.80, below the daily pivot point at 137.11, on sheer JPY strength. Nevertheless, when Europan traders arrived at their offices, EUR/JPY shifted gears and rallied over 130 pips, hitting a daily high at 138.23, returning to current prices.
EUR/JPY Price Prediction: Technical Outlook
EUR/JPY remains trending higher and poised to break the May 9th cycle high at 138.31. However, the cross currency would face a wall of resistance levels on its way north. Nevertheless, the Relative Strength Index (RSI) is above the midline of 50 in bullish territory and has enough room before reaching overbought conditions.
Therefore, the first EUR/JPY supply zone would be at the May 9th high at 138.31. A break above would expose the daily high from April 25 at 139.20, followed by the cycle high from April 22 at 139.48. Once cleared, EUR/JPY could rally towards the April 21st high at 140.00.