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The EUR/JPY Price Analysis Reveals An Uptrend Halting At 159.00, With Investors Aiming For The Year-To-Date High Of 159.70s
EUR/JPY closes at 158.74, having broken above 158.92 for the second consecutive day. JPY is pressured by the ultra-loose monetary policy of the Bank of Japan, whereas positive EU data diminishes the likelihood of an ECB rate hike. Technical analysis indicates further gains are possible, with the year-to-date high of 159.76 serving as the following objective for investors.
The EUR/JPY pair increased for the second consecutive day, surpassing the all-time high of 158.92 set on Thursday. Despite a brief retreat, the pair finished the day at 158.74, logging gains of 0.19%.
A week ago, price action was driven by risk aversion, and the Japanese Yen (JPY) was under pressure due to the Bank of Japan's (BoJ) commitment to its ultra-loose monetary policy. The underlying fundamental environment has remained unchanged. In the interim, the Eurozone's (EU) more favourable economic data has deterred the European Central Bank's (ECB) probability of a rate hike; however, the Euro (EUR) remains vulnerable. Concerns about a recession and inflation that is double the ECB's objective have fueled speculations regarding a stagflationary scenario.
From a technical standpoint, the EUR/JPY remains sideways, albeit with a minor upward bias, due to its lack of clear direction. Upon a breach of 159.00, purchasers might consider examining the year-to-date (YTD) peak at 159.76.
In contrast, if EUR/JPY sellers moved in, 158.00 would be the initial support, followed by 157.75/95 at the apex of the Ichimoku Cloud (Kumo). After being cleared, the cross would penetrate the Kumo, signifying the emergence of sellers gaining momentum; the Tenkan Sen at 157.85 and the Kijun-Sen at 156.64 would provide subsequent support.
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