- The common currency started the week off on the wrong foot, down 0.05%.
- Risk sentiment died down at the start of the week as Russian-Ukrainian talks stalled.
- EUR/JPY price forecast: Upward bias but consolidating.
The common currency’s rally against the Japanese yen stalled on Monday, thanks to risk aversion in financial markets spurred by Russian-Ukrainian peace talks failing to make progress amid tightening global central banks. At 131.61, EUR/JPY mirrors the above, as the safe-haven Yen appreciates.
Wall Street ended the day with losses between 0.04% and 1%. Meanwhile, in the FX space, the Loonie rallied against most G8 currencies, while the JPY edged higher against the euro.
Overnight, EUR/JPY was subdued in the 131.60 area, but in the European session it surged towards the 132.00 area, to find more sellers, which pushed the pair towards the 131.40 area.
EUR/JPY Price Prediction: Technical Outlook
Daily chart
EUR/JPY is biased to the upside, although it faced strong resistance at 132.00. However, EUR/JPY could consolidate as the 78.6% Fibonacci level sits right at 131.28, meaning the pair could trade in a tight range before resuming higher.
Hourly chart
The EUR/JPY 1 hour chart shows the pair consolidating between 131.00 and 132.00. Above the exchange rate is the 50 simple moving average (SMA) at 131.61, while the 100 and 200 SMAs lie at 131.09 and 129.86 respectively. EUR/JPY is biased to the upside, although downside risks remain.
If the cross currency pair rises, the first resistance would be the 50-SMA at 131.61. A break of the latter would expose 132.00, followed by 132.50. On the other hand, the first support for EUR/JPY would be the 78.6% Fibonacci level at 131.28. Once broken, the next support could be the 100-SMA at 131.09, followed by the 131.00 mark. A sustained break would expose the 200-SMA area at 129.86 and the 130.00 mark.
