- The EUR/JPY rallied more than 150 pips and gained 0.25% on Tuesday.
- A hammer in the EUR/JPY daily chart could open the door for further gains.
- The cross faces solid resistance around 136.00-30 in the near term.
The EUR/JPY plunges to the 200-day EMA at 133.71, forms a hammer, and rallies above the August 1 daily close at 134.99, finishing the trading session at 135.37, as buyers regained control in a volatile session. As the Asian session begins, the EUR/JPY is trading at 135.20, almost flat.
EUR/JPY Price Analysis: Technical outlook
The EUR/JPY daily chart illustrates a hammer formed in the daily chart, right on the 200-day EMA. Nevertheless, the cross-currency closing below half of the August 1 price action exposes the pair to selling pressure. With the RSI sitting at negative territory, below the 7-day RSI’s SMA, and far from reaching the mid-line, it could keep the pair subject to market sentiment. If the EUR/JPY tumbles below 135.00, a re-test of the 200-day EMA could be possible due to the volatile price action in the last few days. On the other hand, the EUR/JPY upward moves could be capped at around 136.00.
EUR/JPY 1-hour chart
In the near term, the EUR/JPY bias is neutral to downwards, though the cross-currency pair is trading above the 20 and 50-hour EMAs. However, the pair struggled to crack 135.50, with significant resistance above it, at the confluence of the R1 daily pivot and the 100-hour EMA at 136.06. Any rallies could be capped at the previously mentioned area, alongside the weekly high at 136.34. On the flip side, the EUR/JPY first support would be 135.00-05 area, followed by the daily pivot at 134.72.