EUR/JPY Buyers Continue Advancing Towards Short-Term Targets
Market Overview
The EUR/JPY pair continues its upward movement, fueled by weakening sentiment towards the Japanese yen. The Bank of Japan’s reduced likelihood of an imminent rate hike has placed pressure on the yen, thereby increasing demand for the euro. Concurrently, the euro has benefited from better-than-expected Eurozone Purchasing Managers’ Index (PMI) reports, which provided a tailwind for the European currency against its counterparts.
Technical Analysis
In the 30-minute timeframe, EUR/JPY displays strong bullish momentum as the price successfully breached the short-term resistance level at 158.272. This breakout suggests that buyers are eyeing the next key resistance at 158.513, located at the 141.4% Fibonacci extension level. Should the momentum continue beyond this level, higher targets are anticipated at 158.632 and eventually at 158.855, marking critical milestones for bullish traders.
Oscillators Confirmation
The technical indicators are consistent with the ongoing bullish narrative. The Relative Strength Index (RSI) shows an increasing dominance of buyers, with the oscillator comfortably moving within bullish territory, but not yet overbought. Similarly, the Moving Average Convergence Divergence (MACD) is strengthening, reflecting growing upward momentum. Price action has also stayed above critical moving averages, further supporting the short-term bullish trend.
Alternative Scenario
However, if buyers fail to sustain control above 158.513, the price could retrace towards immediate support levels at 158.049 and possibly 157.689. A failure to hold above these levels could shift the short-term sentiment towards bearish correction. Nevertheless, as long as the price remains above the latter key support, the broader directional bias is expected to stay upward.
Key Levels
- Resistance Levels: 158.513, 158.632, 158.855
- Support Levels: 158.272, 158.049, 157.689
Key Events to Watch
Market participants are now focusing on the upcoming speech by ECB President Christine Lagarde, which is expected to provide further clarity on the central bank’s monetary policy stance. Despite the PMI results exceeding expectations, they remain within contraction territory, which raises concerns regarding underlying economic strength. Any dovish comments from Lagarde could temper the euro’s momentum, whereas hawkish guidance may serve to accelerate the current bullish trend.
Conclusion
EUR/JPY maintains its upward trajectory, with buyers looking to challenge the next resistance at 158.513. A successful breakthrough here could pave the way for further gains towards 158.855, while failure may lead to consolidation or retracement towards key support levels.
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