EUR/JPY Price Analysis: Snaps three-day losses and clings to the 135.00 mark

• The euro remains on the back foot against the Japanese yen, down 2.25% in the week.
• An upbeat market mood is weighing on the JPY safe-haven status.
• EUR/JPY Price Forecast: Remains tilted to the upside as long as it remains above 134.30.

The EUR/JPY records modest losses, after on Wednesday, the euro regained composture and stopped the EUR/JPY fall of close to 500-pips, which began on April 21, when the cross reached a YTD high around 140.00. At 135.58, the EUR/JPY is down some 0.01% as the Asian Pacific session begins.

Asian equity futures point to a higher open, reflecting a positive market sentiment, carrying on Wall Street’s mood. China’s Covid-19 outbreak appears to be controlled. Last reports from China said that Shanghai is about to ease lockdowns restrictions despite the covid zero-tolerance. At the same time, Beijing, struck by the virus over the weekend, reacted fast and is already testing a substantial amount of people.

On Wednesday, the EUR/JPY opened near April’s 11 daily lows, around 135.20s. In the overlap of the Tokyo/Europan sessions, the cross-currency pair edged higher and peaked at around 136.15 (daily’s high). However, a sudden shift in mood sent the pair tumbling below 135.00 though in the mid-North American recovered and settled near current levels.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY remains upward biased from a technical perspective, as shown by the daily chart. As long as the EUR/JPY sits above 134.29, it would stay bullish and further confirmed by the location of the daily moving averages (DMAs) below the exchange rate. Also, the Relative Strenght Index (RSI) above 50 is almost flat and shows no signs of turning bearish.

Therefore, the EUR/JPY bias remains bullish. The EUR/JPY’s first resistance would be April’s 27 daily high at 136.15. A breach of the latter would expose April’s 11 daily high at 137.13, followed by the 138.00 figure.

Key Technical Levels