EUR/JPY Price Analysis: Steady around 128.20s after Tuesday’s volatile session

• On Tuesday, the EUR/JPY finished the day in the green amid risk-off market sentiment.
• Omicron COVID-19 concerns and Fed’s Chair Powell comments dampened the market sentiment, favoring the greenback and safe-haven currencies.
• EUR/JPY: Has an upward bias, above 128.17.

On Tuesday, the EUR/JPY is modestly advancing as the New York session wane, up some %, trading at 128.29 at the time of writing. Comments from an influential pharmaceutical CEO related to vaccine effectiveness against new coronavirus strains, and hawkish remarks of Federal Reserve Chair Jerome Powell, dented the market sentiment, favoring the greenback, the Swiss franc, and the Japanese yen.

However, in the case of the EUR/JPY, the shared currency has the upper hand against the Japanese yen, though in the overnight session, omicron woes caused a sharp drop in the pair, favoring JPY bulls, falling from 128.59 down to 127.89 amid the vaccine comments.

Additionally, on Tuesday, at a hearing at the US Senate Committee on Banking and Housing, Jerome Powell changed its monetary policy stance from neutral-dovish towards a hawkish one. He said that the Fed’s target for inflation has been met and commented that inflation can not be longer considered “transitory.” When those remarks crossed the wires, US equity indices plummeted, and the EUR/USD collapsed 130 pips on a free fall. The EUR/JPY followed its footsteps, but moderately witnessing a 70-pip fall, but as the New York session closed, the pair recovered most of the losses, finishing in the green,

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY 1-hour chart deícts the pair is range-bound between the 127.60-128.63 range, 100-pip wide. At press time, the pair tests the confluence of the 50-hour simple moving average (SMA) and Wednesday’s daily central pivot point at 128.17, acting as support. Also, November 30 high and low are higher, indicating that the EUR/JPY could be headed to the upside in the near term, but it would find some hurdles on the way up.

The first resistance would be November 30 high at 128.60. Breach of the latter would expose the 200-hour SMA at 128.86, followed by the R2 daily pivot point at 129.13.

On the other hand, a break below the daily central pivot point would exert downward pressure on the pair. The first support would be the S1 daily pivot at 127.74, followed by November 30 low at 127.64 and then the November 29 low at 127.48