Home Forex Risk-off momentum sent the pair below 145.00

Risk-off momentum sent the pair below 145.00

by SuperiorInvest
  • Risk-off momentum prevented EUR/JPY from reaching a new YTD high around the psychological 146.00.
  • Failure of EUR/JPY to retest 145.63 sent the pair below 145.00.
  • In the short-term, EUR/JPY may head to the downside, but pro-inflationary risks remain once the pair clears 145.00.

EUR/JPY opens Wednesday’s Asia-Pacific session with decent gains of 0.24%, following Tuesday’s 0.34% loss, on the back of risk-off momentum as US data hit inflation slowing less than expected, fueling US Fed rate options 75 bps. tour. At the time of writing, EUR/JPY is trading at 144.41.

EUR/JPY Price Analysis: Technical Outlook

On Tuesday, EUR/JPY recovered towards the new YTD high reached on Monday at 145.63, but fell below 145.00. This, along with a minimal negative divergence between EUR/JPY and the RSI, could open the door to a decline towards the September 12 daily low of 143.37, ahead of 143.00.

In the short term, EUR/JPY is neutral to bearish. Although a negative divergence emerged, EUR/JPY consolidated in the 144.15-145.00 zone, with the 20-EMA at 144.15 being the first demand zone that would set the stage for further losses after the release.

If the above scenario plays out, the next support for EUR/JPY would be the confluence of the 50-EMA and the daily pivot around 142.14/19. A break below reveals the 100-EMA at 139.98, ahead of the daily S1 pivot at 139.67.

On the other hand, if EUR/JPY clears the September 13 high at 145.37, a re-test of the YTD high is in order.

Key Technical Levels of EUR/JPY

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