EUR/JPY Price Analysis: Climbs towards 138.00 despite a risk-off impulse

• The EUR/JPY daily chart illustrates the pair as neutral-to-downwards biased.
• In the short term, the EUR/JPY might test the 20-day EMA at 138.20 before tumbling to 137.00.

On Tuesday, the EUR/JPY finished the session with minimal gains of 0.28%. However, as the Wednesday Asian session begins, the JPY appreciates while Asian stocks are set for a lower open. At the time of writing, the EUR/JPY is trading at 137.96.

The financial markets narrative remains the same. A US company reported that its economic outlook looks worse than estimated, adding to recession fears. The US bond market shows signs of an impending recession, with the yield curve inversion between the 2s-10s year bond yields further deepening. Despite the previously mentioned factors, the euro stood tall and edged higher vs. the yen.

EUR/JPY Price Analysis: Technical outlook

From a daily chart perspective, the cross-currency is neutral-to-downward biased. A series of successively lower highs/lows confirms the latter. Meanwhile, the 20, 50, and 100-day EMAs above the exchange rate further cement the bias. Therefore, EUR/JPY traders should be aware that unless buyers reclaim the 100-day EMA at 139.84, further selling pressure is on the cards.

The 1-hour EUR/JPY chart portrays the pair advancing steadily, with the hourly Mas below the spot price, while the RSI, albeit below its 7-RSI SMA, signals that buyers are in control. Therefore, don’t discount a leg-up before the one-hour chart aligns with the daily chart’s overall bias.

Therefore, the EUR/JPY first resistance would be the 138.00 figure. A breach of the latter will send the EUR/JPY towards the August 9 high at 138.31, followed by the R2 daily pivot point at 138.92.

EUR/JPY Hourly chart

EUR/JPY Key Technical Levels