- EUR/JPY bounced off the day’s lows at 139.03 and hit a daily high of 141.19 before losing steam.
- The EUR/JPY reclaiming and achieving a daily close above the 200-day EMA keeps bulls hopeful of higher prices.
The Euro (EUR) rallies sharply on Friday, ahead of the weekend, as the Japanese Yen (JPY) weakened following the Bank of Japan’s (BoJ) monetary policy meeting, with the BoJ resolute in keeping its dovish stance, and the Yield Curve Control (YCC). Therefore, the EUR/JPY gains traction and exchanges hands at 140.63, above its opening price by more than 1%.
EUR/JPY Price Analysis: Technical outlook
The EUR/JPY daily chart portrays the pair reclaiming the 20 and 200-day Exponential Moving Averages (EMAs), each at 140.45 and 140.15, respectively, keeping bulls hopeful for higher prices. Additionally, the Relative Strength Index (RSI) aims north and is about to turn bullish, further cementing the neutral-to-upward bias, while the Rate of Change (RoC) portrays strong bullish sentiment in the pair.
Therefore, the EUR/JPY path of least resistance is upwards. Hence, the EUR/JPY’s first resistance would be the January 20 high of 141.19, followed by the January 18 daily high at 141.68, and by the figure at 142.00. As an alternate scenario, EUR/JPY’s failure t crack 141.00 could pave the way for further downside. The EUR/JPY key support levels would be the 140.00 psychological level, followed by the January 20 daily low of 139.03, and then the January 19 swing low of 137.91.