Market news

11 October 2021

EUR/JPY Price Analysis: Trades at three-month fresh highs, buyers eye 131.00

  • The EUR/JPY approaches the 131.00 figure amid a risk-off environment.
  • The euro followed the British pound path, rising against the Japanese yen.
  • EUR/JPY: From a technical perspective, the cross-currency is in an uptrend.

The EUR/JPY is rallying near the 131.00 thresholds, advances almost 1% during the day, trading at 130.93 at the time of writing. A risk-off market sentiment, as witnessed by US stocks indices which posted losses between 0.69% and 0.72%, failed to boost the safe-haven status of the Japanese yen, which was not able to gain traction against any of the G8 currencies.

Meanwhile, the single currency followed the British pound footsteps on the back of hawkish comments made by the Bank of England members, who expressed worries about inflation, and readiness to hike interest rates sooner than foreseen, despite continuing their bond purchasing program.

EUR/JPY Price Forecast: Technical outlook

Daily chart

The EUR/JPY is trading above the 200-day moving average (DMA). The abovementioned signals that the pair could be headed for higher prices, as the 200-DMA indicates the major trend. A daily close above the latter could open the way for further gains. The first resistance level would be the July 13 high at 131.08. A breach of that level could open the door for further gains. The following resistance level would be the July 1 high at 132.42 and the June 1 high at 134.117.

On the flip side, failure at 131.00 could push the cross-currency towards 130.00. In that case, the 200-DMA at 129.80 would be the first support. A breach of that level opens the door for a test of crucial demand levels at the 50-DMA at 129.39, followed by the October 8 low at 128.86.

The Relative Strength Index (RSI) is at 63. As it is located above the 50-midline, meaning that the EUR/JPY has an upside bias.

KEY ADDITIONAL LEVELS TO WATCH

 

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Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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