EUR/JPY Price Analysis: Stalls around 133.30, to find dip buyers around 131.50
- EUR/JPY breaks below 133.00 amid risk-off market due to US high inflation concerns.
- EUR/JPY: Stall at a confluence of a previous daily high and a Pitchfork’s top-line, in line with a correction move.
- EUR/JPY: A move towards the critical support area around 131.50 is on the books.
The EUR/JPY declines during the New York session, down 0.56%, trading at 132.38 at the time of writing.
The market sentiment is dismal, as portrayed by falling US stock indices falling between 0.06% and 0.41%, except the Nasdaq Composite, which rises 0.27%. Meanwhile, the US T-bond 10-year benchmark coupon rallies almost five basis points, sitting at 1.681%, the highest level since March 2021. The market seems convinced that high inflation will force the Federal Reserve to act faster than expected.
EUR/JPY Price Forecast: Technical outlook
Daily chart
The daily chart depicts the cross-currency stalled at 133.37, briefly up of the Andrew’s Pitchfork indicator top-line, retreating the upside move, testing the July 1 high at 132.43, which was previous resistance, turned support. Nevertheless, despite the abovementioned, the EUR/JPY has an upward bias confirmed by the daily moving averages (DMA’s) remaining below the spot price.
A Thursday daily close below 132.43 could spur a move towards the confluence of the 38.2% Fibonacci retracement with the mid-line of Andrew’s Pîtchfork indicator around the 131.55 area, which could find dip-buyers, as the confluence of two indicators would exert upward pressure around the area. However, in the outcome of breaking lower, a dip towards the 50% Fibonacci retracement at 130.93 is on the books before resuming the upward move.
The Relative Strength Index (RSI), a momentum indicator, is at 65, aiming lower, suggesting that a correction might be underway before turning north in line with the prevalent trend.
