EUR/JPY Price Analysis: Remains negative on failure at 139.00, sellers eye 137.00

• The EUR/JPY accumulates losses of 2% in the week.
• Despite an upbeat market sentiment, the EUR/JPY could not rally, weighed by the EU’s energy crisis.
• EUR/JPY to tumble towards 137.00 on buyers unable to reclaim 139.00.

The EUR/JPY keeps tumbling despite an upbeat market sentiment, courtesy of fading recession fears, as US Fed policymakers reiterated recession worries are overblown. At 138.20, the EUR/JPY is barely up 0.11% as the Asian Pacific session begins.

EU energy prices and slower economic growth are a headwind for the EUR/JPY

Futures in Asia are pointing towards a higher open. During the week, concerns of a worldwide recession were the narrative around the financial markets. Nevertheless, on Thursday,  Fed’s Waller and Bullard dismissed those fears regarding the US, and both backed a 75 bps rate hike to the Federal funds rate in July.

Talking about the euro area, high energy prices, and the slowing economic path, as depicted by S&P Global PMIs in the bloc about to enter the contractionary territory, weighed on the EUR/JPY.

In the meantime, the EUR/JPY Thursday’s price action depicts the pair was under selling pressure but consolidated around the 138.00-139.00 area, as the Japanese yen weakened throughout the day.

EUR/JPY Daily chart

The cross-currency pair tumbled below the 50 -day EMA around 139.00 on Tuesday, opening the door for further losses. Sellers capitalized on that, dragging the pair towards the weekly low at 137.26, but in the end, the EUR/JPY settled above the 138.00 mark. Meanwhile, with oscillators in bearish territory and EUR/JPY exchange rate below the 20 and 50-day EMA, the EUR/JPY might be headed to the downside.

Therefore, the EUR/JPY’s first support would be the July 6 daily low at 137.26. Break below will expose the May 23 daily high-turned-support at 136.79, followed by a test of the 100-day EMA at 136.00.

EUR/JPY Key Technical Levels