EUR/JPY Price Analysis: Closes to an eight-year-high around 147.00, on risk-on mood

• EUR/JPY rallied more than 1.40% on Monday due to an upbeat sentiment.
• The cross-currency pair printed a new eight-year high at 146.71.
• Negative divergence in the EUR/JPY daily opens the door for a mean reversion fall to 145.00; otherwise, a test of 147.00 is on the cards.

The EUR/JPY prints a fresh eight-year high at around 146.71, courtesy of broad Japanese yen weakness, as the Bank of Japan (BoJ) pledges to its dovish stance, despite other Japanese authorities' verbal intervention in the FX markets, saying that exchange rates must reflect fundamentals. At the time of writing, the EUR/JPY is trading at 146.67.

EUR/JPY Price Forecast

The EUR/JPY edges higher, breaking to fresh YTD highs, though the last leg-up appears to be happening with insufficient strength, as shown by the Relative Strength Index (RSI). The RSI in the EUR/JPY daily chart suggests that buyers are losing momentum, with RSI registering lower peaks, contrary to the cross-currency pair price action, printing higher highs. Therefore, in the near term, the EUR/JPY could fall toward the 145.00 figure before the EUR/JPY continues to extend its gains.

If that scenario plays out, the EUR/JPY first support would be 146.00. Break below will expose the September 12 daily high of 145.63, followed by the 145.00 target.

On the flip side, the EUR/JPY first resistance would be 147.00. Once cleared, the following key resistance levels would be the December 20134 high of 149.78, followed by the July 2008 high of 169.96.

EUR/JPY Key Technical Levels