EUR/JPY Price Analysis: Soars to fresh 5-week highs, holds to gains above 146.40

• The Euro gained traction against the Japanese Yen for fundamental reasons, supported by a bounce at the 20-day EMA.
• EUR/JPY Price Analysis: Upward biased above 146.00; otherwise, a fall towards 145.00 is on the cards.

The EUR/JPY soared more than 150 pips on Thursday following the European Central Bank’s (ECB) decision to hike rates by 50 bps while guiding that it would continue to raise rates. Consequently, the EUR/JPY rallied, and as the Asian session began, the EUR/JPY exchanges hands at 146.36, below its opening price.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY daily chart suggests the pair is upward biased since it cleared all the daily Exponential Moving Averages (EMAs). Nevertheless, it was further cemented by Thursday’s price action, with the EUR/JPY breaking November’s 23 immediate resistance at 146.13, which opened the door for a new 5-week high at 146.72. Oscillators are mixed, with the Relative Strength Index (RSI) in bullish territory but flat, while the Rate of Change (RoC) on its 9-day period suggests that prices could be close to overextending and subject to a mean reversion move.

The EUR/JPY key resistance levels lie at 147.11 November 9 swing high. A breach of the latter will expose the October 31 daily peak of 147.75, followed by the YTD high at 148.40.

As an alternate scenario, EUR/JPY’s failure to hold to gains above 146.00 could play for the sellers’ hands. Therefore, the EUR/JPY first support would be the 145.00 psychological mark, followed by the 20-day EMA at 144.56, followed closely by the 50-day EMA at 144.13, and the 100-day EMA at 142.75.

EUR/JPY Key Technical Levels