EUR/JPY Price Analysis: Bulls reclaim 138.00 and set their eyes on the YTD high around 140.00

• The EUR/JPY moderately climbs some 0.07% as the Asin Pacific session begins.
• Sentiment remains negative, though the JPY weakened as other global central banks began tightening monetary conditions.
• EUR/JPY Price Forecast: To accelerate towards 140.00, once EUR/JPY bulls reclaim 139.00.

The EUR/JPY extends its rally for the fourth consecutive trading day due to a weaker Japanese yen, the weakest currency of Tuesday’s trading session in the FX complex. At 138.13, the EUR/JPY aims higher, and bulls have set their target around May 9 daily high at 138.32.

Sentiment remains negative, fundamentally for no reason than broad US dollar strength, courtesy of month-end flows. US equities closed with losses between 0.31% and 1.35%. China’s reported positive news related to May’s Covid-19 outbreak as Beijing and Shanghai prepares to lift some restrictions.

Of late, the EU Commission agreed to Russia’s oil embargo. Earlier, in the European session, inflation in the Euro area skyrocketed towards 8.1% YoY, higher than the 7.7% estimation

EUR/JPY Tuesday’s price action showed that the cross-currency dipped towards 136.80 daily lows, below the daily pivot point at 137.11, on pure JPY strength. Nevertheless, as Europan traders got to their desks, the EUR/JPY shifted gears and rallied more than 130 pips, reaching a daily high at 138.23, returning to current prices.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY remains upward biased and poised for a break of the May 9 138.31 cycle high. However, the cross-currency would face a wall of resistance levels on its way north. Nonetheless,  the Relative Strength Index (RSI) is above the 50-midline in the bullish territory and has enough room to spare before reaching overbought conditions.

Therefore, the EUR/JPY first supply zone would be May 9 high at 138.31. Break above would expose April’s 25 daily high at 139.20, followed by April’s 22 cycle high at 139.48. Once cleared, the EUR/JPY could rally towards April’s 21 YTD high at 140.00.

Key Technical Levels