Despite Hawkish ECB Wagers, The EUR/JPY Exchange Rate Retreats To Around 144.00

After a brief retracement to 144.50 during the Asian session, the EUR/JPY pair has declined abruptly to near 144.00. Early in the Asian session, the cross displayed a significant bullish reaction to the news that OPEC+ had unexpectedly reduced oil production. Nonetheless, the tentative action has ceased for the moment.

As one of the world's primary importers of oil, the Japanese Yen came under intense pressure following a meteoric rise in the price of crude oil.

Preliminary Harmonized Index of Consumer Prices (HICP) (March) data maintained the Euro active in the Eurozone. The headline HICP decreased to 6.9% from 7.1% and 8.5% respectively in the previous release and the consensus. However, the monthly figure increased to 0.9% from 0.8% in February and as predicted. In addition, the core monthly HICP figure surged to 1.2% from the anticipated 0.6%.

An unexpected increase in Eurozone inflation is anticipated to force the European Central Bank (ECB) to announce additional interest rates to combat the persistent inflation.

On a four-hour time frame, EUR/JPY has fallen sharply after encountering formidable barriers near the horizontal resistance drawn from the February 28 high of 145.47. After a solid uptrend, the cross has experienced a correction, which is likely to result in a move toward the 20-period Exponential Moving Average (EMA) near 143.85.

The Relative Strength Index (RSI) (14) has fallen into the 40.00-60.00 range, indicating a loss of upside momentum, but the upside bias has not yet vanished.

A break above the intraday high at 144.58 would propel the asset towards the high from March 31 at 145.67, followed by the high from December 16 at 146.72.

In contrast, a decline below the March 30 low of 143.13 would draw the cross toward the March 14 low of 142.53 and the March 13 low of 141.57.