EUR/JPY Price Analysis: Breaks to seven-year highs around 139.00s

• The shared currency prints a 200 plus pip gains vs. the Japanese yen.
• The verbal “intervention” by the Japanese Minister of Finance Suzuki and BoJ Governor Kuroda was ignored by market players.
• EUR/JPY Price Forecast: The break above 137.50 opened the door towards 141.05.

The EUR/JPY skyrockets more than 200-pips on Tuesday, amidst broad Japanese yen weakness and a risk-on market mood, which keeps US equities trading in the green. At the time of writing, the EUR/JPY is trading at 138.95, some pips below fresh seven-year highs.

The day’s main story is the Japanese yen, weakening against most G8 currencies throughout the day. Minimal efforts of verbal intervention in the FX market by the Japanese Minister of Finance Suzuki and BoJ Governor Kuroda were mainly ignored by market players, as the EUR/JPY soars more than 200-pips.

On Tuesday, the Japanese Government Bond (JGB) of 10-years reached a daily high of 0.276%, two basis points above the yield curve control (YCC) imposed by the BoJ. Nevertheless, it sits at 0.239% at the time of writing, just below the 0.25% BoJ target.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY monthly chart depicts the pair as upward biased. The Relative Strength Index (RSI), a momentum oscillator at 66.95, has enough room to spare if the EUR/JPY aims toward higher prices.

Now that the EUR/JPY left February’s 2018 swing highs at 137.50 behind, the EUR/JPY following target would be the June 2015 swing highs at 141.05. Once cleared, the next resistance would be the December 2014 cycle high at 149.78.

However, if the EUR/JPY fails to record a daily close above 137.50, it might open the door for further downside pressure. The first support would be the 137.00 mark, followed by June 2021 cycle highs at 134.12, followed by a seven-year-old downslope trendline turned resistance around 132.00.

Technical levels to watch